Julie Wainwright, CEO of luxury consignment store The RealReal has raised funds for her business several times. She has indicated that she would eventually pursue an IPO but that it would be far into the future. Most likely after a round of private financing. Perhaps now is that time.
Several sources informed Recode that The RealReal is currently seeking to raise 100 million dollars in funding from investors. This amount would be 70 million dollars less than what The RealReal has previously raised, and we are left wondering if this is the pre-IPO round of raising funds. The popularity of the luxury site that focuses on selling luxury goods that have been pre-owned from brands like Louis Vuitton, Chanel, Cartier, and Hermes is a good indicator that The RealReal will succeed in raising the new funds. This new infusion of funds could indicate that The RealReal is getting ready for an IPO.
However, there could be other reasons for The realReal’s newest round of raising funds. It could be that the company seeks to grow larger and needs capital to finance that growth. The RealReal might have analyzed the market and found that there is a demand for pre-owned luxury goods. Alternatively, they could need more capital to prove to investors that The RealReal would work in the long term as a standalone business. So far Wainwright has not commented on the reason for seeking new investors and raising capital.
The RealReal is a consignment store that focuses on selling pre-owned luxury goods. They receive items from the seller and once they have sold the item The RealReal shares 50 to 60 percent of the profits with the original seller. Though The RealReal has an in-house authentication team, a well-made fake has slipped through their authentication system.
The RealReal focused on selling women’s luxury fashion when the company was first founded but has since expanded into selling jewelry, menswear, art, and home décor. The company recently opened a pop-up store in Las Vegas and a brick and mortar location. The RealReal is not the only pre-owned consignment store. ThredUp, Tradesy, and Poshmark all sell pre-owned items. Though each store has a different model for conducting business and some sell new items.
The RealReal is collaborating with luxury brand sellers. The companies that once found The RealReal threatening have now realized that The RealReal is driving sales of their brands.