US fashion resale company ThredUp has announced it has received 175 million dollars in funding that it will use to “fuel a new wave of growth and platform expansion.”
With the new funding, ThredUp is launching a platform called RAAS (Resale-As-A-Service), which will provide services for retailers to buy and sell secondhand clothes. The services will mean retailers can add ThredUp products to their stores or websites, and will allow them to offer ‘Clean Out Kits’ to their customers for them to send old clothes to ThredUp and earn shopping credit to buy new clothes.
Additionally, ThredUp said the funding will allow it to expand its infrastructure by building a new automated distribution centre, support the growth and scale of its core marketplace - its “try-before-you-buy” Goody Boxes and its retail locations - and continue to cut down on environmental and financial waste in the company.
This latest news comes as the resale fashion market continues to go from strength to strength, as customers increasingly see it as a viable alternative to the regular fashion retail market which is often associated with environmentally damaging production processes and excessive waste.
According to ThredUp’s annual Resale Report, the resale fashion market has grown 21 times faster than the retail fashion market in the past three years and in the next five years is projected to more than double from 24 billion dollars to 51 billion dollars.
Last week, major US department stores Macy’s and JCPenney both announced they had entered into partnerships with the San Francisco-based resale company.
“Consumer shopping preferences are changing. They have swapped malls for dynamic, always-fresh shopping experiences. They like to own less and rotate their wardrobes more. They demand sustainability and refuse to over-pay for anything," ThredUp CEO and founder James Reinhart said in a statement.“These changes are driving incredible demand for the resale market, and are leading to a major transformation of the modern closet. We’re energized by our investors’ confidence to continue leading this movement, expand our resale platform and usher in a more sustainable fashion future.”
The investment was led by Park West Asset Management and Irving Investors with existing investors, Goldman Sachs Investment Partners, Upfront Ventures, Highland Capital Partners and Redpoint Ventures participating. This brings ThredUp’s total capital raised to more than 300 million dollars, including a previously undisclosed 75 million dollar investment that the company received last year.
“ThredUp has built a platform and an intuitive marketplace that brings a 50 billion dollar industry online, making it easy for buyers, sellers and retail partners to participate in secondhand,” Russell Lynde from Park West Asset Management said in a statement. “What the ThredUp team has built is complex, defensible and highly scalable. ThredUp is uniquely positioned to thrive, lead the market and power the broader resale economy. We’re thrilled to partner with the world’s most powerful resale engine.”
Photo courtesy of ThredUp
Photo courtesy of ThredUp