Second-hand clothes has exploded as a class over the previous couple of a long time. A London startup that’s constructed a first-of-its-kind platform to enhance how this very fragmented trade operates is now saying funding to double down on the chance.
Fleek, a web based market that connects second-hand clothes wholesalers with those that promote it at retail, has raised a $20.4 million Collection A to proceed increasing its platform. Up to now, Fleek says it has labored with some 10,000 resellers and retailers from 70 nations, transferring 2.5 million gadgets of second-hand garments from 1,000 wholesale suppliers.
The funding comes from a powerful record of backers: HV Capital is main the spherical, whereas Andreesen Horowitz (which led the startup’s seed spherical) and accelerator Y Combinator (the place Fleek was part of the Winter 2022 batch) are collaborating. Particular person backers within the spherical embrace Shopify president Harley Finkelstein, Depop’s ex-CEO Maria Raga, and Postmates’ CTO Sean Plaice.
Fleek was based by buddies Abhi Arora and Sanket Agarwal following a really direct grievance from a future in-law.
It was 2021, and the mom of Agarwal’s then-girlfriend, who bought garments on second-hand social commerce web site Poshmark (now owned by Naver), was speaking about sourcing issues on account of provide chain points on the peak of the Covid-19 pandemic. Individually, Arora, contemporary out of an MBA at Cambridge, was dwelling near Brick Lane in London, a significant vacation spot for second-hand garments patrons, and he went over there to analyze what issues have been like.
He bought to chatting with a classic garments store supervisor. Used-clothing wholesalers, the supervisor instructed him, function funnels for sourcing clothes, offering many second-hand shops with inventory. These wholesalers have been offline, so the retailers tended to journey to supply items from the wholesalers in individual, choosing by racks, going “heads down, bums up,” within the phrases of Arora, Fleek’s CEO.
That observe turned inconceivable with journey restrictions, but what this retailer had observed was {that a} handful of the wholesalers had began displaying off their items on Instagram, and so they have been negotiating ad-hoc over video calls.
That gave Arora and Agarwal, a software program engineer who beforehand labored at Google, their inspiration. They’d construct a market to make it simpler for any wholesaler to promote on-line, and for any retailer to purchase that method. Make the expertise constant for everybody on each side of the desk and take a minimize on the cost for offering the service.
Fleek’s fee, Agarwal mentioned, relies on the quantity and high quality of products being bought: its minimize comes out of the funds that patrons are paying to the wholesalers.
After which, as they began to look into who these offline wholesalers truly have been, it felt like destiny.
“It turned out that the sub-continent is likely one of the largest exporters and importers of used garments,” Arora mentioned. “Sanket and I each grew up in India. We converse the language. That actually helped us join with these wholesalers.”
From fundamental necessity to virtuous circles and classic vibes
It wasn’t that way back that second-hand clothes was primarily the area of lower-income shoppers: charity outlets and donation factors have been mainstays for gathering these gadgets and redistributing them to those that wanted them close to and much… typically very far. The entire means of consumption and promoting was fairly analog.
Over time, the idea has had a significant makeover, significantly in additional developed economies, the place second-hand clothes — typically loftily known as “classic” — has come into its personal. Moreover those that can’t spend so much or simply wish to get monetary savings, there are customers who can afford to purchase new garments, however they go for second-hand to claim their individuality in a sea of mass-market items. Or they’re shopping for used to faucet into the round economic system and virtuously cut back waste.
For these of us looking out for a diamond-in-the-rough discount, costs will not be a lot totally different than new, and in lots of instances, a lot larger. And the variety of locations promoting used garments has ballooned. Charity outlets now compete with extra curated second-hand shops, and even main chains like City Outfitters and high-end high-street boutiques are leaning into the classic vibe.
Alongside this has been a increase of on-line sellers throughout eBay, Vinted, Poshmark, ThredUp, The RealReal, Depop, Instagram, TikTok, and plenty of extra. Used clothes now makes up 10% of all clothes gross sales, in accordance with a survey from GlobalData and ThredUp.
The ECDB, a specialist e-commerce information analytics agency, estimates that 68% of all Gen-Z and Millennial shoppers within the U.Okay. (a giant marketplace for classic) purchased no less than one second-hand merchandise within the final yr.
Fleek has prospects all all over the world shopping for items from its sellers, however in accordance with Arora, the most important suppliers usually are not people who donate their garments to charity, however wholesalers, who on this case are very giant warehouses which are the last word collectors and distributors of these gadgets.
The wholesalers that Fleek tends to work with are in nations like Pakistan, India and Dubai, and so they serve each the creating world (nonetheless main prospects for second-hand garments) and the developed world (the place somebody with an even bigger pockets would possibly pay as a lot or presumably extra for an ideal pair of used Levi’s over a brand new pair).
After I spoke to Arora and Agarwal the opposite day, they have been respectively in Pakistan and India visiting suppliers, and so they mentioned that sometimes these wholesalers can deal with — soak up, type, mend, clear up and ship out — as much as 400,000 kilograms of clothes in a single day. That sounds chaotic, however that’s what makes Fleek so attention-grabbing: Go to the positioning and also you’ll see excessive group, the place these a whole lot of hundreds of kilos could be purchased by weight, or by model, fashion, measurement, materials and extra.
In addition to doing the arduous work of bringing huge, bodily companies on-line for the primary time, Fleek can be spinning up know-how for these additional alongside that journey.
It already provides predictive analytics to prospects to assist them forecast totally different traits. (Certainly this must be programmed to only inform patrons to hunt issues well-liked 20 and 40 years beforehand.) You would think about extra AI tooling to assist with high quality management and to higher safeguard towards counterfeiting, one thing the 2 admit is a big downside within the trade that they wish to assist cease.
One other space it should seemingly develop extra performance is in rushing up logistics round shopping for, transport and receiving, particularly round wholesalers who’re being positively reviewed by patrons, mentioned Agarwal.
“We wish to carry on extra patrons, carry on extra sellers, and construct know-how to proceed empowering these entrepreneurs on each side of {the marketplace},” he mentioned.
