Vinted has recently finished its funding round led by Lightspeed Venture Partners, previous backers Sprints Capital, Inside Venture Partners, Accel and Burda Principal Investments. The startup raised a total of $141 million and reached a total valuation of $1 billion. Since the startup is from Lithuania, it is now the second unicorn startup coming out from the Baltics. Previously, an Estonian startup Taxify, which now has rebranded to Bolt had reached a valuation of $1 billion.
The company will use the funds for its further expansion in Europe. Also, it will build new features to its platform in order to improve the buying and selling process for users’ used clothes.
“We want to make sure we don’t have new products. All our sellers are regular people,” commented Vinted CEO Thomas Plantenga.
He also adds that 75% of Vinted’s users have never bought or sold second-hand clothes in their lives.
The company has had its ups and downs. It was founded in 2008, and up until 2016 when they almost had run out of money, they were expanding significantly. But in 2016 they changed their business model. Investors brought in Thomas Plantenga to turn their business around.
“We changed the business model in 2016 to make the costs as low as possible for users to list clothes. That produced a dramatic change in our growth trajectory,” he explains.
To make the changes, they removed a lot of expensive plans for their international expansion strategy and they changed the listing fees to zero, that way incouraging people to list more items. Now Vinted charges a 5% commission only if the customer wants to conduct transactions on the Vinted platform. Users can post, sell and buy for free.
Apparently these changes in the company worked and in 2018 it raised $50 million.
Today Vinted has around 180 million products on its platform, it is being used in 12 European markets and it has approximately 25 million registered users. In 2019 the company expects to sell €1.3 billion in clothes and previously it has seen its sales grow 4x in the last 17 months.
“At Lightspeed, we look for outlier management teams building generational companies. We’ve been impressed by the team’s ability to build an incredible product and value proposition for their community and adapt and expand their business along the way. Vinted is defining its market and has built a global brand in C2C commerce and communities. We’re proud to partner with Vinted and leverage our global platform and resources to help them continue to build on their success and achieve their goals,” commented Brad Twohig, a partner at Lightspeed.
For now, Vinted is holding back its expansion into US markets because that field is being dominated by such industry giants like eBay, OfferUp, Letgo, Poshmark, and many more.
Author: Janis Rijnieks