(Bloomberg) -- SoftBank Group Corp. joined a fundraising round by online fashion platform Vestiaire Collective that raises its valuation to $1.7 billion as appetite for secondhand luxury items booms.
The French company raised a total of 178 million euros ($209 million) from SoftBank Vision Fund 2, a private-equity vehicle of the Japanese tech giant, and other investors. These include Generation Investment Management as well as existing shareholders such as Conde Nast and Eurazeo, Vestiaire Collective said Wednesday.
The fundraising shows how venture capital firms and broader investors are keen to back tech-enabled market platforms such as Vestiaire Collective that are extending the lifespan of clothes as younger consumers become more environmentally conscious.
The platform already raised the same amount in March, backed by Gucci owner Kering SA and Tiger Global Management.
Global sales of secondhand goods are expected to double to $77 billion by 2025, according to a report from GlobalData commissioned by resale platform ThredUp. In a sign of the market’s frothiness, Poshmark and ThredUp went public this year, joining The RealReal’s 2019 IPO. Shares in The RealReal have lost around a third of their value since then. Poshmark’s have lost more than 40%, while ThredUp are up by around a third.
Carbon Footprint
Vestiaire Collective aims to use the additional funding to boost its technology and enter new markets. The platform also said it’s seeking to help build a “more sustainable fashion industry,” citing initiatives to promote local transactions so as to reduce deliveries’ carbon footprint.
The logistics around delivery are “our biggest part of carbon emissions; we’re really working on reducing that,” Vestiaire Collective Chief Executive Officer Maximilian Bittner said in an interview, adding that the largest source of emissions derived from an item comes from production.
Vestiaire Collective declined to disclose annual revenue and whether it’s profitable, but said orders in the past 12 months have risen by more than 90% globally and have doubled in the U.S., its biggest market. Vestiaire Collective has also made inroads in Asia, notably Hong Kong and Singapore, markets that have long spurned secondhand clothes.
SoftBank Chief Operating Officer Marcelo Claure will join the board of Vestiaire Collective. In an interview, Claure said his experience of founding and running Brightstar, one of the biggest resellers of Apple’s iPhone, should help Vestiaire Collective.
“We invented the pre-owned luxury mobile,” Claure said. “The fashion industry will undergo the same when it comes to the secondhand market as the mobile phone business,” once did.
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