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Vestiaire Collective’s Luxury Resale Model Nabs $209M

Secondhand luxury platform and B Corp Vestiaire Collective has raised 178 million euros ($209.2 million) in a financing round.

The financing round was backed by SoftBank Vision Fund 2 and Generation Investment Management, which will take an observer seat. SoftBank Vision is the venture capital arm of SoftBank Group, the world’s largest technology-focused investment fund. Also adding to their investments are existing shareholders Bpifrance (Large Venture), Condé Nast, Eurazeo, certain fund managed by Fidelity International and Korelya Capital.

The latest round values the seller of premium pre-owned designer goods at $1.7 billion, Vestiaire said, adding that its model is “transforming consumers’ relationship to the luxury fashion industry at an accelerated pace.” Orders grew more than 90 percent globally over the past 12 months, it added. Orders from the U.S. orders, now Vestiaire’s largest market, rose 100 percent, while orders in Asia jumped 150 percent.

“We are honoured and delighted that SoftBank Vision Fund 2 and Generation Investment Management have decided to partner with Vestiaire Collective. It is a recognition of our achievements, and also confirms the attractiveness of our positioning embracing luxury, technology, sustainability and community,” Vestiaire CEO Maximilian Bittner said. “Their respective experiences as preeminent global investors supporting high-growth business models will be highly valuable to us in our next phase of development.”

SoftBank Group International CEO Marcelo Claure described Vestiaire as a “great consumer-tech company” that’s “transforming the timeless luxury fashion industry for the better.”

What’s more, the company “operates at the intersection of multiple sector trends with growth in luxury retail, ongoing shift to online, and a focus on sustainability,” added Claure, who also serves as chief operating officer at SoftBank Group and will join the Vestiaire board. “And it is doing so with a business model that is well positioned to scale globally.”

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Shalini Rao, Generation Investment Management’s director of growth equity, noted that total greenhouse gas emissions from textiles production exceed emissions from all international flights and maritime ships combined. “To drive industry-wide transition, it must become as easy and as satisfying to buy preowned goods as it is to buy new ones,” Rao said. “Vestiaire helps move consumers towards higher-quality, more durably made, and longer-lasting pre-loved fashion.”

According to Dechert, the law firm representing Vestiaire in the transaction, said the luxury resale player become the “11th French Tech unicorn” after raising 178 million euros ($216 million at the time) in March from investors including Kering and Tiger Global. Earlier fundraising rounds garnered 59 million euros ($69.3 million) in 2020 and a 40 million euros ($47.0 million) raise in 2019.

The funding will help the newly certified B Corp. leverage its leadership position to educate consumers, brands and other stakeholders build a more sustainable fashion industry. The raise is also earmarked for  proprietary technology and differentiated services development, and will help the firm penetrate new and existing markets, particularly by promoting local-to-local low-carbon-footprint transactions.

Earlier this year, Mytheresa forged a deal allowing its clientele to sell their high-end wares through Vestiaire’s platform.

According the pre-loved fashion platform, “25,000 new items are submitted by sellers every week, which enables buyers to search over 3,500 coveted and must have fashion pieces a day.”

The French company has grown to over 7 million fashion members located in over 50 countries in Europe, the U.S., Asia and Australia since launching in 2009 in competition with The RealReal.

After a lackluster deal year in 2020, a rebounding economy has sparked a surge in investor activity. Investors have been busy targeting the public markets through initial public offerings in addition to mergers and acquisitions through SPACs (special purpose acquisition corporations).

Other recent deals include Brentwood Associates’ sale of its stake in men’s underwear firm Saxx Underwear Co. to TZP Group, and the acquisition of Chubbies Shorts by Solo Stove. Represented by The Sage Group as its investment banker, Chubbies is a men’s clothing line for the weekend. Solo is a branded outdoor heating and cooking business. In addition to Chubbies, Solo also acquired Oru Kayak and ISLE to form a new direct-to-consumer focused outdoor portfolio called Solo Brands, according to Sage.