Expanding Operations Globally
The latest funding round was led by EQT Growth, along with participation from existing business investors Accel, Burda Principal Investments, Insight Partners, Lightspeed Venture Partners, and Sprints Capital.
“Vinted is transforming the second-hand fashion market across Europe through their customer-centric approach and extraordinary execution,” said Carolina Brochado.
The business funding round marks a big leap for Vinted in terms of business valuation. The ecommerce startup company previously entered the unicorn territory at the end of 2019. Vinted reached this milestone before the COVID-19 outbreak, which had a significantly positive impact on business growth for the Lithuania-based startup company.
Vinted now operates across 13 markets, most of them in Europe. The ecommerce fashion company plans to use the fresh capital to continue expanding its business operations across the globe.
“Our platform offers a great, easy-to-use product and helps people experience the benefits of second-hand trade. We want to replicate the success we've built in our existing European markets in new geographies and will continue investing to improve not only our product, but also to ensure we continue having a positive impact,” said Thomas Plantenga, CEO of the ecommerce company.
Vinted currently has around 45 million users who use the platform to upload pictures of their own clothes and home goods to sell or simply look for similar items to buy. While users do not pay any listing fees, the ecommerce startup company charges a “buyer protection” rate between 3% to 8% of an item or gets a direct cut, depending on the value of the item.
The circular economy, which refers to a system where consumers act as both suppliers and buyers of goods and services, is considered useful because it often gives consumers a better deal by excluding some other players from the retail chain. The system has proven to be very effective since last year when consumers started spending more time at home looking to save or make extra money.
The startup completely shut down its operations for the first two months after the COVID-19 virus outbreak in Europe. This strategy helped the business to better understand how to tackle new market conditions while protecting people from the virus, but business recovered ground quickly.
The startup is quite strict about making sure that the platform is used only for fashion and home goods, which means no cars, furniture, pets, etc.
“Yes, it could be a big opportunity, but we have purposely said no to that,” Pantenga said. He acknowledged that overproduction was one of the many issues in the fashion industry, but not one Vinted was going to address itself as he wants his ecommerce company to focus more on fixing consumer trends.
“All those issues around the fashion industry and production, there are many of them. But we are focused on second hand being your first choice. Yes, it could be a great way to grow GMV, but that’s not how we strategize,” he added.
Lithuanian ecommerce startup company Vinted secured more than $300 million in a new business funding round, bringing its post-money valuation to $4.5 billion.
About the Author
Mariliana has an MSC in Consumer Analytics and Business Strategy. She has a special interest in fast-moving industries and Big Data.