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Trove Recommerce, a maker of online platforms for brands such as Lululemon and Patagonia to sell used goods, raised $77.5 million from investors trying to get in on the hottest part of the apparel market.
The Series D round, led by G2 Venture Partners, brings the company’s total funding to $122.5 million, Trove said. The investment increases the company’s valuation to between $200 million and $300 million, according to a person familiar with the deal who asked not to be identified. Trove declined to comment on the valuation or other financial metrics. However, it did say that in 2020 more than 1 million items were sold on its platform, triple the total from a year earlier.
Trove, based in Brisbane, California, will use the new capital to expand a customer base that includes nine brands, according to Andy Ruben, the company’s founder and chief executive officer. Interest from potential customers boomed this year with resale continuing its rapid growth, and Trove is considering another 50 potential partners. It also plans to expand further into luxury and outside the US.
“Brands are all coming to the same realisation: They see massive amounts of their products on peer-to-peer websites and have no control,” said Brook Porter, a founding partner at G2 Venture Partners. Trove’s current customers expect secondhand items to become 10 percent to 30 percent of sales, he said. “It’s a huge opportunity.”
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Secondhand goods have been sold online for decades, but in recent years peer-to-peer platforms such as Poshmark made it much easier for buyers and sellers to connect and transact. That helped turn reselling into a lucrative part of the gig economy. And sellers found a burgeoning, mostly younger audience drawn to used items for their lower prices and reduced impact on the environment.
Global sales of secondhand goods are expected to double to $77 billion by 2025, according to a report from GlobalData commissioned by resale platform ThredUp. In a sign of the market’s frothiness, Poshmark and ThredUp went public this year, joining The RealReal’s 2019 IPO. Analysts expect this trio to increase sales more than 20 percent this year to a combined total of $1 billion.
Trove started as a peer-to-peer platform in 2012, but pivoted to offering resale-related services directly to brands, including repairing items, pricing them and fulfilling orders. It also gets a cut of sales. Ruben, a 48-year-old former e-commerce executive at Walmart, pitched using Trove so brands could control part of the resale market for its products instead of ceding all those sales to other companies.
Resale would also give brands a clearer message on sustainability. Pretty quickly another perk became apparent: Most of the shoppers buying used goods were new customers. Now more than 70% of buyers on Trove’s platform are purchasing from that brand for the first time. That’s helped ease concerns about cutting into sales of new goods.
Even just a year ago, a lot of brands Trove talked to debated whether to get into the resale market, Ruben said. “Now they know they have to be a part of this.”
Patagonia invested in Trove in 2014 and debuted its resale platform three years later. In the past year, sales through its Worn Wear site surged 300 percent, according to Asha Agrawal, managing director for Patagonia’s Tin Shed Ventures, which took a stake in Trove.
The company has been experimenting with how far to take this. In November, Patagonia placed links to used items on the product pages of new ones — a strategy other Trove customers are considering, and one that could really expand acceptance of secondhand goods.
“Sky is the limit,” Agrawal said of resale’s potential. “Today’s consumers are looking for sustainable products, not ones that have a single use or single owner.”
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By Matthew Townsend
Learn more:
BoF unpacks emerging models of resale services for brands, including Reflaunt, a startup that counts Ganni’s founder among its latest investors, and Vestiaire Collective’s new ‘Brand Approved’ programme.
