Upscale e-commerce consignment startup the RealReal on Tuesday said it closed a $50 million growth equity financing from private equity firm Great Hill Partners, bringing the company's total funding to $173 million, according to a company press release.
Great Hill Partners Managing Partner Michael Kumin will join company’s board, and the funding will be used to continue scaling operations and category expertise and to expand its Luxury Consignment Offices and retail concepts. That could include a brick-and-mortar retail shop, following the success of a New York City-based popup experiment late last year, TechCrunch reports.
Founded in 2011, The RealReal says it provides the largest selection of pre-owned authenticated luxury items including women's and men's fashion, fine jewelry, watches, fine art and home; consignors earn up to 70% of the sale price, according to a press release.
The online resale retail market continues to flourish, with sites like Poshmark, ThredUP and, of course, eBay jockeying for position. Even the likes of Goodwill are helping diminish demand for new items, according to research last year from Retail Metrics.
“Technology has made it possible for shoppers to purchase, borrow or sell with the click of a mouse, by-passing traditional retailers altogether,” Retail Metrics founder/president Ken Perkins told Retail Dive in an email last year. “Companies like The RealReal have greased the skids for consumers to become retailers themselves. Thrift shops are thriving as Goodwill and Salvation Army stores among others have expanded… All of this speaks to less demand for new product at full price. Consumers were trained by retailers during the Great Recession to shop on sale and many retailers have found it difficult to exit the promotional merry-go-round. The key point here is much of the U.S. population are gravitating toward these venues based on an inherent necessity to stretch tight budgets.”
The RealReal has differentiated itself in the space by keeping its consignments upmarket, including high-end watches, jewelry and designer apparel and accessories. "Six years in, The RealReal continues to expand in exciting ways and this incremental capital will be instrumental in supporting the business and our continuous growth," The RealReal CEO and founder Julie Wainwright said in a press release Tuesday.
The RealReal now has 5 million buyers and consignors with 4 million items sold across all luxury categories. The company operates offices in six U.S. cities, offering free valuations of fine jewelry and watches from certified gemologists, as well as a white glove consignment service. So far this year, The RealReal is already expected to pay consignors some $300 million from the resale of their luxury items, the company said. Kumin suggested in his statement Tuesday that that makes the startup an attractive investment.
"The RealReal has established itself as an innovator in the luxury category delivering significant value to both consignors and buyers," he said. "We are excited to work with Julie and The RealReal's talented management team, leveraging Great Hill's experience in helping scale leading e-commerce companies.”