The RealReal has built a business of $100 million around second hand Christian Louboutin pumps and Chanel flap bags. Now the company wants to double its size using new venture funding to achieve that goal.
The online consignment store for luxury items announced Thursday it raised $40 million its venture funding round that was its biggest to date. The Series D funding round, led by Industry Ventures came close to doubling the total backing of the company to $83 million.
RealReal CEO Julie Wainwright says the objective at the current time is to reach profitability, a goal the CEO wants before the end of 2015. To achieve that, she must keep expanding the business.
The shop, exclusively online, is part of a new wave of e-commerce fashion startups popping up of late from Rue La La and Gilt, which are flash sale sites to Ms. Collection and StitchFix, which are subscription services. Other marketplaces that work on consignment competing with RealReal include Tradesy.
With more than 3.5 million members that are signed on, RealReal takes the consigned items in possession up front, has them authenticated and guarantees genuineness.
The verification process is necessary since the site deals in many industries that are plagued with knockoffs and counterfeiting from the bootleg silkscreen Andy Warhols to the fake satchels of Louis Vuitton.
To battle against forgeries, the site has employed staff in house that includes fashion pros, horologists, gemologists and appraisers.
Wainwright said her consignors have become a retail force by spending as much of the money they are making from reselling unwanted wares at luxury retailers such as Saks Fifth Avenue, Neiman Marcus and Barney’s. Consignors receive 60% to 70% of the price of the sale and are expected to have total payments of more than $100 million in 2015.
Wainwright for the moment will keep her focus on growth in the current product categories the company has instead of entering other categories.
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