The fashion resale market is an industry rife with start-ups. Venture-backed business that try to stand out from the rest. RealReal is not different. Launched back in 2011 the internet-based luxury consignment retailer operates much like eBay. The one difference is that RealReal deals in high-end luxury brands like Gucci and Yves Saint Laurent. The goal of any web-based start-up is too eventually stand on its own, take the leap and become a full business. Since its establishment RealReal has raised $170 million dollars investments, it has also made a reputable name for itself. In a recent announcement from CEO Julie Wainwright it was revealed that RealReal is seeking another $100 million. Now may speculate as to why.
For many years now Wainwright has teased RealReal’s expansion into IPO. Those promises have been extended to a new round each time. The newest round may very well be the last, but at present it is anyone’s guess. So here are a two of the prominent guesses.
It cannot go public yet.
One way people are looking at RealReal’s need for further funds is that it does not have enough capital to make it on its own. So $100 million is a way to get further funds and time to reach the scale necessary to stand on its own. It also allows the company to gain more investors and acquisitions.
Resale is too lucrative.
Others postulate that there is too much money to be had in secondhand. The company and its investors have realized that there is more opportunity than initially perceived. So they are holding back to gain a bigger market share with more growth. Then when they go out on their own, they will have dominate the market.
Whatever the case, not easy to become active the decision to seek more funding means RealReal wants to do it right. RealReal operates using the consignment model, reselling goods for profit which it splits with the sellers that provide them. Individuals get top-rate quality at a lower price, while sellers get a return on the investment they initially made.