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The RealReal — the fashion site that sells secondhand Gucci and Louis Vuitton — wants to raise a new $100 million investment

Is this the real, real pre-IPO round?

The RealReal founder and CEO Julie Wainwright sits for an onstage interview at a 2016 Code Commerce event in Las Vegas.
The RealReal founder and CEO Julie Wainwright
Recode/Alex Ulreich
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

For several years, The RealReal’s CEO Julie Wainwright has proclaimed that her company’s next round of private financing would be its last before an eventual IPO — only to then go ahead and secure a new investment. Perhaps this time will be the charm.

Wainwright, the founder of the luxury fashion site that specializes in the sale of secondhand clothing from brands like Gucci and Louis Vuitton, is currently pitching investors about raising a fresh $100 million in new funding, multiple sources have told Recode. The company has already raised more than $170 million since it launched seven years ago.

There are a couple of ways to look at the reason for these new fundraising efforts. On the one hand, it could be that the company has not yet reached the scale that would appeal to public-market investors and acquirers — or that the business needs more time and capital to prove it works as a standalone business long-term.

On the other hand, it might be the case that The RealReal and its investors have realized that the secondhand market for luxury goods is a much bigger opportunity than they initially thought, and they feel confident that the site can take even greater market share by investing more in growth.

I’d ask Wainwright whether either of these views are fair, but she hasn’t yet responded to multiple requests for comment. I’ll update this post if she does.

The RealReal works under a consignment model, where sellers ship goods to the company and the company then sells an item and shares the proceeds — usually around 50 to 60 percent — with the individual. The company employs an in-house authentication team that reviews every item to guard against fakes before they make their way onto the website, though stuff still slips through the cracks.

What started out as a site focused on women’s luxury fashion has since branched into menswear, jewelry, art, watches and home decor, with a New York City brick-and-mortar location and potentially more on the way.

The company is one of a handful of venture-backed online businesses in the fashion resale sector that is still standing and trying to carve off pieces of eBay’s business while expanding the market.

Others include ThredUp, which only in the last year started selling luxury labels alongside more affordable brands; Poshmark, which has shifted away from focusing exclusively on used clothing; and Tradesy, which operates on a peer-to-peer model where sellers ship items directly to the buyer.

For years, many luxury brands looked at sites like The RealReal as the enemy. But that’s no longer the case across the board, in part because they are driving considerable sales and being seen as a growth area.

Case in point: Kering — the parent company of brands like Gucci and Yves Saint Laurent — highlighted on its last earnings call that many of The RealReal’s sellers go on to buy an item from the same brand they sold.

“[W]e’re collaborating with them actively,” a company executive said, according to a transcript of the call.

Here’s an interview I did with Wainwright at the first Recode Code Commerce event back in May of 2016:

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