Vinted, a website where users can buy and sell used clothes, has raised €128 million in a funding round, valuing it at €1 billion. The Vilnius-based retailer rounds up a century of venture-backed unicorns in Europe.
It’s a remarkable turnaround story. Just three years back, Vinted, Lithuanian tech’s posterchild, was on the brink of collapse left with just €12 million in the bank, according to Deutche Welle .
That’s when one of the investors tapped Thomas Plantenga, a former executive at online marketplace OLX, to help salvage the 8-year-old startup. Plantenga called for a major overhaul that involved a change in the business model, including ditching mandatory sales fee, office closures and job cuts.
The strategy worked. Vinted saw sales soar and investors pump much needed cash, making it to one of the biggest secondhand fashion marketplaces in the world.
Just a few days back, the company raised €128 million in a funding round that valued the company at €1 billion and gave Lithuania its first tech unicorn. The funding was led by Silicon Valley venture capital fund Lightspeed Venture Partners.
“We are very excited to get validation from external parties that we are on the right track in terms of building a big European business,” Plantenga, who is now the chief executive officer, told DW. “We can now move forward with heavy investments to improve our product, customer support and our expansion rate.”
Just like many other great ideas, Vinted was born out of necessity. Co-founder Milda Mitkutė was moving to a new apartment but realised she had too many clothes to take with her. Her friend, Justas Janauskas, built a website to help her get rid of her extra clothes. This was the genesis of Vinted.
The Vilnius-based retailer today has 25 million registered users across its 11 European markets. Germany, where it operates under the brand name Kleiderkreisel, France, Belgium and Spain are its largest markets.
Vinted, which has yet to post a profit, said its revenue has increased fourfold since the company’s last funding round in the summer of 2018. The company did not disclose to DW its revenue and loss figures for 2018.
“As a company, we have a very strong focus on creating a business that has strong unit economics and has all the proof points to be profitable at any point we would want it to be,” Plantenga said. “We do not have an exact timeline on when we need to be profitable. The more good opportunities we find to expand, the longer it will take us to be profitable.”
Secondhand fashion on rise
Vinted, where users can buy or sell used clothes and accessories, is one of the many secondhand fashion marketplaces that have mushroomed in the past decade.
The secondhand apparel market, excluding clothing rentals, was valued at $24 billion in 2018 and is expected to grow to $64 billion by 2028, according to online fashion resale platform thredUP and retail analytics firm Global Data. By comparison, the fast-fashion market, which was worth $35 billion in 2018, is expected to only touch $44 billion.
The lure of the secondhand has also rubbed on world’s second-largest fashion retailer, Sweden’s H