Looks like you can still raise money as an e-commerce startup. As long as Amazon isn’t in the same business.
The RealReal, a shopping site that sells second-hand designer fashion, has raised $40 million in a new investment, pushing total money raised to $123 million since it launched five years ago.
The round was led by Greenspring Associates, a firm that both invests in venture capital funds as well as directly in later-stage private companies. The startup said it would use the money to expand overseas and potentially open more warehouses and jewelry appraisal locations.
Founder and CEO Julie Wainwright declined to comment on the company’s valuation, other than to say it wasn’t lower than it was during the last investment round and that it didn’t contain "structure" or uncommon, unfavorable terms. She added that the company originally planned to wait until 2017 to raise what she says will be its final investment as a private company ahead of an eventual IPO. But uncertainty in the private-company investment market led her to take the money now.
"You have a fear that the money will dry up," she said, "and I might have more fear than others because I’ve been through it before."
Wainwright had been CEO of several companies, including Pets.com, which went bankrupt a year after going public during the dot-com bust. She’ll be one of three speakers at Recode’s first Code/Commerce event on May 17 in Las Vegas in conjunction with Shoptalk. There are just a few seats left, so apply for an invitation today.
The RealReal sells lightly-worn apparel and accessories from high-end brands like Chanel, Gucci and Prada and is focusing more on jewelry sales, too. It is one of a handful of second-hand clothing startups still standing after several startups were forced to sell on the cheap over the past year. Together, these companies have attempted to build standalone businesses by pursuing a market that Amazon doesn’t play in, and which is just one piece of what eBay does.
One way The RealReal distinguishes itself is by requiring people who want to sell stuff on the site to send items to the company for inspection. The site employs an authentication team that evaluates each item to try to catch knockoffs. Once an item is sold, the company pays sellers, on average, around 65 percent of the purchase price. The remaining 35 percent cut serves as The RealReal’s main revenue stream.
The startup sold more than $200 million in total merchandise in 2015. Wainwright said the company makes money on each item it sells, but the overall business is unprofitable. She said the goal is to change that by the end of this year.
This article originally appeared on Recode.net.