“The RealReal opened in San Francisco six years ago. The company sells high end, authenticated resale items for the home, men and women. Julie Wainwright is the CEO and founder of the business. She has decided the next round of private financing received by the business will be the last prior to an IPO only. Julie Wainwright specializes in clothing from brands including Louis Vuitton and Gucci. She is trying to raise new funding for $100 million from investors. Since the launch the business has raised $170 million.
The fundraising efforts can be looked at several different ways. Its possible the business is not yet at a level appealing to acquirers and investors. Its also possible the company requires more capital and time to achieve growth as a standalone business. The case may be the investors of the RealReal have realized the luxury goods secondhand market is a much better opportunity than originally believed. This would mean they have confidence a bigger market share is possible if investments are received for the growth of the company.
A consignment model is used at the RealReal. Once an item has been sold, fifty to sixty percent of the proceeds are shared with the individual. The company has their own authentication team to eliminate fake merchandise prior to being seen on the website. The site originally specialized in luxury fashions for women but has expanded to include menswear, watches, jewelry and home décor. In addition to the website there is now a physical location in New York. This is one of few online businesses with venture backing in the sector of fashion retail. As they expand the market they are attempting to gain business from eBay.
The RealReal’s site was looked upon as the enemy by numerous luxury brands for years. This has started to change because the RealReal is driving a lot of sales across the board. The company is now considered a growth area. A good example are the brands Yves Saint Laurent and Gucci. A lot of the sellers for the RealReal will purchase a new item from the same brand they have recently sold.” Find out more about The RealReal: https://techcrunch.com/2017/06/06/the-realreal-ropes-in-50-million-in-new-funding/