TheRealReal Closes $40M Funding Round, Cynthia Ringo to Join BOD

TechCrunch
April 10, 2015

Lux­ury Con­sign­ment Site The Real­Real Adds $40 Mil­lion In New Funding

By Sarah Perez:

Online lux­ury con­sign­ment site The Real­Real announced this morn­ing its largest round of financ­ing to date with news that it has closed on $40 mil­lion in Series D fund­ing, as the com­pany is poised to dou­ble its $100 mil­lion in annual rev­enue in 2015. The round was led by Indus­try Ven­tures and included par­tic­i­pa­tion from new investors Grey­croft Growth, e.ventures Growth, and DBL Partners.

Exist­ing investors Canaan Part­ners and Inter­West Part­ners also par­tic­i­pated, bring­ing the service’s total raise to date to $83 mil­lion. The com­pany also gained a new board mem­ber with DBL’s Cyn­thia Ringo who joined with this round.

The fund­ing comes at a time when a num­ber of online con­sign­ment shops have sprung up to tackle an area of e-​​commerce which his­tor­i­cally has been dom­i­nated by mar­ket­places like eBay. Today, how­ever, there’s a wide range of online con­sign­ment shops, with every­thing from sites where users sell fast fash­ion via peer-​​to-​​peer mar­ket­places up to white glove offer­ings where com­pa­nies vet and authen­ti­cate high-​​end items them­selves before pho­tograph­ing them and list­ing them for sale on behalf of sellers.

The Real­Real falls on this lat­ter end of the online con­sign­ment spec­trum as it offers a full-​​service mar­ket­place where gar­ments, bags, jew­elry, art and other items are inspected and authen­ti­cated before being sold, so buy­ers can be sure that what they’re buy­ing is, well, real. Addi­tion­ally, the site offers its own white glove ser­vice in 18 U.S. cities where lux­ury man­agers will come to buy­ers’ homes, con­sult with them and then pick up their items.

realreal-bags

The company’s authen­ti­ca­tion process has helped to dif­fer­en­ti­ate the site from sev­eral com­peti­tors and could even poten­tially eat away at eBay rev­enue in future. How­ever, with $100 mil­lion or even $200 mil­lion in rev­enue rolling in, The Real­Real is still a small frac­tion of the larger lux­ury goods mar­ket. Ebay, for exam­ple, report­edly sees $2 bil­lion to $4 bil­lion in lux­ury good sales annually.

The RealReal’s busi­ness model involves offer­ing its con­sign­ers 60%-70% of the sale price, and then keeps the remain­ing por­tion for itself. The com­pany is not yet prof­itable, how­ever, but that’s what the fund­ing round is aimed at achiev­ing. To get there, the site will need to be able to scale more quickly – includ­ing adding new inven­tory at a fast and reg­u­lar pace as well as turn­ing it around and get­ting it sold quickly, too.

Cur­rently,  The Real­Real touts 3.5 mil­lion mem­bers, 315 employ­ees and ships to 61 coun­tries. To date, the site has sold 1 mil­lion items, and is expected to pay out its con­sign­ers over $100 mil­lion in 2015.

The com­pany also notes that its fastest grow­ing cat­e­gories include men’s fash­ion as well as fine jew­elry and watches. Pre­vi­ously, the site has been more female-​​focused so the expan­sions in these cat­e­gories could poten­tially broaden its reach to new demo­graph­ics, which could also encour­age growth. Menswear saw 225% growth from 2013 to 2014 and is expected to see 125% growth in 2015, The Real­Real states. Mean­while, the fine jew­elry and watches cat­e­gory grew 251% from 2013 to last year and is expected to remain roughly the same (250% growth) again this year.

 

To read the full arti­cle, click here.