Vestiaire becomes a unicorn thanks to Softbank and Al Gore – used luxury fashion is booming

Dusseldorf Vestiaire Collective: International investors have apparently taken note of the name. In March, a sum of almost 180 million euros had already ensured that Vestiaire, as a provider of high-quality second-hand fashion, became a French unicorn, i.e. a start-up with a valuation of more than a billion euros. Now two very well-known investors are putting another 180 million euros on top. The valuation is now around 1.7 billion euros, announced Vestiaire.

With Softbank, founder Fanny Moizant and the German CEO Maximilian Bittner, who joined in 2018 with his own money, have now won one of the most renowned tech investors for themselves. In addition, Generation Investment Management gives money, a sustainability-focused investor with former US Vice President Al Gore as chairman and founding partner in its ranks. The other previous donors have also reinvested, as Vestiaire announced. Since spring, the luxury goods manufacturer Kering has also been part of it with five percent.

He spoke to Al Gore at the beginning of the year, as Bittner said in an interview with the Handelsblatt. He sees the new donors as an “accolade” for Vestiaire Collective. Marcelo Claure, CEO of SoftBank Group International, will join the Board of Directors of Vestiaire. He sees the company, founded in 2009, at the intersection of “several industry trends with growth in luxury retail, ongoing conversion to online and an active focus on sustainability”.

Vestiaire initially focused on designer second-hand clothing and also supplied the authentication service for the bags and fashion items that were still used, which were still expensive.

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Worldwide textile industry responsible for four percent of CO2 emissions

When Bittner joined in 2018, he broadened the scope of the start-up. More platform than online retailer, more cheaper, but high-quality second-hand clothing, apart from Chanel and Louis Vuitton, and thirdly, especially with the slightly cheaper models, the chance that buyers and sellers themselves become active and authenticate You can also leave out your wish. In the meantime, 70 percent of the volume of goods is sold directly between sellers and buyers, explains Bittner.

As a result, the volume of goods apparently increased significantly. Bittner persistently does not give any current figures. Sales in 2020 were 400 million, he told the Frankfurter Allgemeine Zeitung in spring. On average, the shopping cart is around 300 euros, eleven million users in 60 nations and Vestiaire currently has three million items of clothing according to its own information.

However, nothing has changed about the mission to breathe a second life into high-quality, long-lasting fashion. Bittner is convinced that he is part of the solution in the textile industry and not part of the problem.

Shalini Rao from Generation Investment Management does the math: The total amount of greenhouse gas emissions from textile production exceeds the emissions of all international flights and seagoing ships combined. Therefore, it must be “just as easy and tempting to buy second-hand fashion as new items”. According to a study by Mc Kinsey, the global clothing and footwear industry already generated 2.1 billion tons of CO2 in 2018. That is roughly as much as France, Germany and Great Britain put together.

Trend 1: More sustainability and more second hand in fashion

Vestiaire is just one of many companies that focus on second-hand fashion and are currently growing strongly. Rebelle from Germany is also active in the designer segment. Vinted, the Lithuanian company that previously traded under the name Kleiderkreisel, and Momox, the company that also sells other second-hand goods such as books on its platform, demonstrate the customers’ interest in sustainability.

For some time now, Europe’s largest fashion platform Zalando and About You, which belongs to the Otto Group, have also been on the market with fashion items that have already been worn.

The calculation: if customers buy more and more sustainably, second-hand products will become more and more important and recognized. The Boston Consulting Group had already determined in a study for Vestiaire in 2020 that the pandemic was intensifying the trend towards more sustainable products.

So far, the market share of the entire textile market is only around two percent, but the second-hand goods could increase by 15 to 20 percent in the next five years, the consultancy estimates. Almost 70 percent of consumers planned to buy second-hand products in the future. In 2020, so-called pre-owned products already accounted for almost ten percent of total sales in the luxury market.

“The nice thing is that with us sustainability and profitability are not mutually exclusive, they belong together,” says Bittner. That wasn’t so much of a focus in his previous engagements. After working at Mc Kinsey, he built a platform for Rocket Internet in Asia, “Lazada”, which was eventually sold to Alibaba for billions.

Vestiaire has also had a so-called B Corp certification for almost two weeks. So far, it is the only company in the industry that has so far been part of it, the company said. The US-based non-profit organization B Lab awards the certificate to companies that have themselves regularly checked for their positive impact on society and the environment. Around 3500 companies worldwide have this seal.

Trend 2: More money for French start-ups

After the French President Emanuelle Macron made the promotion of his own tech companies a top priority, France is currently experiencing a financing boom that has also been observed in Germany for some time. This week alone, the soccer platform Sorare, the platform developer Mirakl and now Vestiare announced large financing rounds. All of them have long been start-ups valued in the billions.

More: In the middle of the pandemic, the entrepreneur is celebrating success with his latest project: Vestiaire Collective. The sale of luxury second-hand fashion is booming, and investors are queuing up.

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