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 Sequence A to proceed increasing its platform. To this point, Fleek says it has labored with some 10,000 resellers and retailers from 70 nations, shifting 2.5 million gadgets of second-hand garments from 1,000 wholesale suppliers.
The funding comes from a powerful listing 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 taking part. 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 offered garments on second-hand social commerce website Poshmark (now owned by Naver), was speaking about sourcing issues as a result of provide chain points on the top of the Covid-19 pandemic. Individually, Arora, recent out of an MBA at Cambridge, was residing near Brick Lane in London, a serious vacation spot for second-hand garments patrons, and he went over there to analyze what issues had been like.
He bought to chatting with a classic garments store supervisor. Used-clothing wholesalers, the supervisor informed him, function funnels for sourcing clothes, offering many second-hand shops with inventory. These wholesalers had been offline, so the retailers tended to journey to supply items from the wholesalers in individual, choosing via racks, going “heads down, bums up,” within the phrases of Arora, Fleek’s CEO.
That follow grew to become unimaginable with journey restrictions, but what this retailer had observed was {that a} handful of the wholesalers had began exhibiting off their items on Instagram, and so they had 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 either side of the desk and take a lower on the fee for offering the service.
Fleek’s fee, Agarwal mentioned, depends upon the quantity and high quality of products being offered: its lower 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 had been, it felt like destiny.
“It turned out that the sub-continent is without doubt one of the largest exporters and importers of used garments,” Arora mentioned. “Sanket and I each grew up in India. We communicate the language. That actually helped us join with these wholesalers.”
From primary 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 had been mainstays for accumulating these gadgets and redistributing them to those that wanted them close to and much… generally very far. The entire means of consumption and promoting was fairly analog.
Over time, the idea has had a serious makeover, notably in additional developed economies, the place second-hand clothes — generally loftily known as “classic” — has come into its personal. In addition to those that can’t spend rather a lot or simply need to lower your expenses, 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 cut price, costs might not be a lot totally different than new, and in lots of circumstances, a lot increased. 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 boom of online sellers throughout eBay, Vinted, Poshmark, ThredUp, The RealReal, Depop, Instagram, TikTok, and lots 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.Ok. (a giant marketplace for classic) purchased not less than one second-hand merchandise within the final yr.
Fleek has clients all around the globe shopping for items from its sellers, however in accordance with Arora, the largest suppliers should not people who donate their garments to charity, however wholesalers, who on this case are very massive warehouses which can be 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 clients for second-hand garments) and the developed world (the place somebody with a much bigger pockets would possibly pay as a lot or probably extra for an important pair of used Levi’s over a brand new pair).
Once I spoke to Arora and Agarwal the opposite day, they had 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 location and also you’ll see excessive group, the place these lots of of hundreds of kilos will be purchased by weight, or by model, fashion, measurement, materials and extra.
In addition to doing the laborious 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 clients to assist them forecast totally different developments. (Certainly this must be programmed to simply inform patrons to hunt issues widespread 20 and 40 years beforehand.) You possibly can think about extra AI tooling to assist with high quality management and to higher safeguard in opposition to counterfeiting, one thing the 2 admit is a big downside within the trade that they need to assist cease.
One other space it can seemingly develop extra performance is in dashing up logistics round shopping for, transport and receiving, particularly round wholesalers who’re being positively reviewed by patrons, mentioned Agarwal.
“We need to deliver on extra patrons, deliver on extra sellers, and construct know-how to proceed empowering these entrepreneurs on either side of {the marketplace},” he mentioned.
