Vinted has prevented people from throwing away their old clothes and provided them a platform to make money out of their discarded garments. It has changed the shopping habits of many people and helped them to get better clothes for a lesser price. The idea to build a platform comes after its co-founder, Milda Mitkute, wanted some help to declutter her wardrobe. The second-hand market platform was founded in December 2008 and is based in Lithuania.
This European startup raised $141 Million and has surpassed the milestone of $1 Billion in valuation. The funding round was led by Lightspeed Venture Partners, with previous backers namely Sprints Capital, Insight Venture Partners, Accel, and Burda Principal Investments.
Tech Crunch has reported that it will use the money to expand its presence in Europe and build more features that will improve the buying and selling experience. For now, Vinted charges a 5% commission if the transaction is completed on the platform itself. However, the users can also sell their clothes offline, but the users won’t get “buyer protection” and shipping privileges.
Vinted is struggling to enter the crowded US market, as it faces tough competition from platforms such as eBay, OfferUp, Letgo, and Poshmark. However, it is gradually digging into many European marketplaces, Germany being the biggest market yet. According to a market report, the second-hand clothes market is expected to reach $25-$35 Billion by 2025.
The Lithuanian company changed its business model in 2016, after Chief Executive Officer Thomas Plantenga took the charge and overhauled the business. In the company’s recent filings, Vinted has three-folded its revenue to $36.2 Million, while the losses quadrupled to $46.24 Million.
Plantenga said, “We’re in a stage that is very unpredictable what exactly the financial future of this company will be”. He further stated, “We will take nothing off the table, but we don’t have exact plans for the next couple of years”.