Rebag, which buys, sells and trades luxury items like handbags and accessories, raised a $33 million Series E round after a year of technology development and category expansion.
In 2015, we profiled Rebag, which had raised $4 million in seed funding to go after The RealReal, and had included two "g's" in its name.
Novator led the latest round, with participation from existing investors, including General Catalyst, to bring the company's total funding to $101 million.
The founder and CEO of Rebag declined to talk about valuation, but did say that it was a steep evolution from the last time. The Series D round in 2020 was led by Novator.
Rebagg has $4 million in seed funding to take on TheRealReal.
The path of Rebag was uncertain at that time. The company was weighing its options and he took the money to have some buffer. He said that the company ended up with two strong years of revenue growth, with 50% in 2020 and 70% in 2021.
It was a function of COVID generating digitization of underpenetrated industries. Purchases of luxury goods in the U.S. have gone up by 20% since COVID. Our goal was to make the experience more accessible in the luxury stores.
The company has seen a decrease in the number of items they own, but of those that are purchased, they are of higher quality, are made better, are longer lasting and retain some resale value. In the luxury space, you want to build trust when you spend that kind of money, because Rebag's average ticket is $2,000.
Fine jewelry and watches grew four times in the past year. The company launched its Clair Trade and Clair Artificial Intelligence technology in 2020. There are more than 30,000 items in the marketplace.
Rebag has proprietary software that can instantly recognize and price bags from the top 50 luxury brands, through an app or by uploading an image, and an offer from Rebag to buy it. The instant trade-in program is used to buy and sell items in a single transaction.
The new capital will be used to continue technology development on those tools, to add to Rebag's workforce of 150 people and expand its marketing. The company currently has seven brick-and-mortar stores in New York, Los Angeles, Miami, Beverly Hills, and Connecticut, with plans to add more in 2022.
The market for venture capital is active and favorable, and we seized on that opportunity to accelerate funding. The resale market is booming and we believe we have created something special.
The company has added touch points throughout the store, including a self-service kiosk where customers can receive an instant price quote on the item they are selling. The Rebag Bar in New York offers a personalized digital shopping experience, as well as being able to purchase and pay for resale items within an hour.
Vinted raised $303 million for its 2nd-hand clothes marketplace used by 45 million people and is now valued at $4.5 billion.
One out of 10 luxury items are transacted in the resale market, and there are dozens of secondhand marketplaces for handbags and other items.
ThredUp, which went public earlier this year after raising over $300 million in funding, predicts that the secondhand market will double and reach $77 billion by the year 2025.
The RealReal and Poshmark are close competitors to Rebag. The average ticket purchase is vastly different, with The RealReal costing $500 and Poshmark costing $30, he noted.
Rebag controls the purchases and sales, which can cause transactions to take days as each party manages their own sides.
The value prop is on the high-end goods market and we want to be the trusted place for premium resale. We want to be a leader in this space, where we believe there will eventually be a large resale community, and we want to be a part of it.
The company amended its funding round size to $33 million.
ThredUp's IPO filing is notraveling, but a shifting business model.
