Second-hand clothes has exploded as a class over the previous couple of many years. A London startup that’s constructed a first-of-its-kind platform to enhance how this very fragmented business 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. To this point, Fleek says it has labored with some 10,000 resellers and retailers from 70 international locations, transferring 2.5 million objects 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 embody Shopify president Harley Finkelstein, Depop’s ex-CEO Maria Raga, and Postmates’ CTO Sean Plaice.
Fleek was based by associates 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, contemporary out of an MBA at Cambridge, was residing near Brick Lane in London, a significant vacation spot for second-hand garments consumers, and he went over there to research what issues had been like.
He received 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 had been offline, so the retailers tended to journey to supply items from the wholesalers in particular person, choosing by racks, going “heads down, bums up,” within the phrases of Arora, Fleek’s CEO.
That observe turned unimaginable with journey restrictions, but what this retailer had seen 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 might 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 cost for offering the service.
Fleek’s fee, Agarwal stated, relies on the quantity and high quality of products being offered: its lower comes out of the funds that consumers 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 likely one of the largest exporters and importers of used garments,” Arora stated. “Sanket and I each grew up in India. We communicate 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 retailers and donation factors had been mainstays for accumulating these objects and redistributing them to those that wanted them close to and much… generally very far. The entire technique 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 — generally loftily known as “classic” — has come into its personal. Apart from those that can’t spend so much or simply need to lower your expenses, there are customers who can afford to purchase new garments, however they go for second-hand to say their individuality in a sea of mass-market items. Or they’re shopping for used to faucet into the round financial system and virtuously scale 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 instances, a lot greater. And the variety of locations promoting used garments has ballooned. Charity retailers 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 growth 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.Ok. (a giant marketplace for classic) purchased no less than one second-hand merchandise within the final 12 months.
Fleek has clients all all over the world shopping for items from its sellers, however in accordance with Arora, the most important suppliers should not people who donate their garments to charity, however wholesalers, who on this case are very massive warehouses which are the last word collectors and distributors of these objects.
The wholesalers that Fleek tends to work with are in international locations 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 may pay as a lot or probably extra for an amazing 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 stated that sometimes these wholesalers can deal with — absorb, kind, 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 may be purchased by weight, or by model, fashion, measurement, materials and extra.
In addition to doing the laborious work of bringing large, bodily companies on-line for the primary time, Fleek can also be spinning up expertise for these additional alongside that journey.
It already presents predictive analytics to clients to assist them forecast totally different developments. (Certainly this must be programmed to simply inform consumers to hunt issues common 20 and 40 years beforehand.) You possibly can think about extra AI tooling to assist with high quality management and to raised safeguard towards counterfeiting, one thing the 2 admit is a large downside within the business that they need to assist cease.
One other space it is going to probably develop extra performance is in rushing up logistics round shopping for, delivery and receiving, particularly round wholesalers who’re being positively reviewed by consumers, stated Agarwal.
“We need to carry on extra consumers, carry on extra sellers, and construct expertise to proceed empowering these entrepreneurs on either side of {the marketplace},” he stated.
