Vintage clothing has exploded as a category over the past few decades. A London start-up that has built a first-of-its-kind platform to improve the way this highly fragmented industry operates has announced funding to double down on this opportunity.
Fleek, an online marketplace that connects used clothing wholesalers and retailers, has raised $20.4 million ($14.8 million in Series A and $5.6 million in seed, first announced today) to continue expanding its platform. Fleek says it has worked with around 10,000 resellers and retailers in 70 countries and moved 2.5 million pieces of used clothing from 1,000 wholesalers.
This investment comes from an impressive list of backers. HV Capital is leading the round, with participation also from Andreessen Horowitz (who led the startup's seed round) and accelerator Y Combinator (of which Fleek was part of the winter 2022 batch). Individual backers in this round include Shopify president Harley Finkelstein, former Depop CEO Maria Raga, and Postmates CTO Sean Plaice.
Fleek was founded by friends Abhi Arora and Sanket Agarwal following direct complaints from prospective in-laws.
The year is 2021, and Agarwal's then-girlfriend's mother, who was selling clothing on second-hand social commerce site Poshmark (now owned by Naver), was in the middle of the COVID-19 pandemic. He was talking about procurement issues due to supply chain issues. Separately, Arora, who had just completed her MBA from Cambridge, lived near London's Brick Lane, a major destination for second-hand clothes buyers, so she went there to investigate the situation.
He ended up having a chat with the manager of the thrift store. According to the manager, vintage clothing wholesalers act as a funnel for sourcing clothing and provide inventory to many vintage clothing stores. These wholesalers were offline, so retailers traveled to source products directly from wholesalers and, in the words of Fleek CEO Arora, “kept their heads down and pissed off” off the shelves. There was a tendency to choose products.
Although travel restrictions have made such activities impossible, the retailer has noticed a small number of wholesalers have started showcasing their products on Instagram and conducting ad-hoc negotiations over video calls. That's what it meant.
This inspired Arora and Agarwal, a software engineer who previously worked at Google. They plan to build a marketplace for wholesalers to sell online and retailers to buy online. Deliver a consistent experience to everyone on both sides of the table and pay less for your services.
Agarwal said Freak's commission is determined by the quantity and quality of goods sold, with its share coming from the price buyers pay to wholesalers.
And when I started investigating who these offline wholesalers actually are, it felt like fate.
“The subcontinent turns out to be one of the largest importers and exporters of used clothing,” Arora said. “Both Sanket and I grew up in India. We speak the language. This has been very helpful in connecting with wholesalers.”
From basic necessities to virtuous cycles and vintage vibes
It wasn't that long ago that used clothing was primarily the domain of low-income consumers. Charity shops and donation points were the mainstay for collecting used clothing and redistributing it to those in need near and far, and sometimes very far. The entire process from purchase to sale was very analog.
Over the years, this concept has changed significantly, especially in developed countries, where second-hand clothing (sometimes snobbishly referred to as “vintage”) has come into its own. In addition to those who don't have a lot of money to spend or want to save money, there are also shoppers who can afford new clothes but choose second-hand items to express their individuality in the face of a plethora of products. Or they are buying second-hand to take advantage of the circular economy and reduce waste wisely.
For those looking for a bargain on a rough diamond, the price may not be much different than new, but it is often much higher. And the number of places selling used clothing has also mushroomed. Charity shops now compete with select thrift stores, and even big chains like Urban Outfitters and high-end luxury boutiques are leaning into vintage vibes.
Added to this is the boom in online retailers such as eBay, Vinted, Poshmark, ThredUp, The RealReal, Depop, Instagram, and TikTok. According to a study by GlobalData and ThredUp, used clothing currently accounts for 10% of all clothing sales.
ECDB, a specialist e-commerce data analytics company, estimates that 68% of all Gen Z and Millennial consumers in the UK (a big market for vintage goods) have purchased at least one second-hand item in the last year .
Fleek has customers all over the world who buy from sellers, but Arora said its largest suppliers are wholesalers, rather than individuals who donate clothes to charities; is a very large warehouse that is the ultimate collector and seller. those items.
The wholesalers that Fleek tends to work with are in countries like Pakistan, India, and Dubai, with people in developing countries (still the main customers for used clothing) and developed countries (those with bigger wallets paying similar amounts) We provide services to both countries. You'll probably find more value in a nice pair of used Levi's than a new one).
When I spoke to Arora and Agarwal recently, they were visiting suppliers in Pakistan and India, respectively, and these wholesalers typically pick up up to 400,000 kilograms of imported goods, sorting, repairing and cleaning them. , said it could be shipped. Outfit for the day. It sounds chaotic, but that's what's interesting about Fleek. Visiting the site reveals extreme organization, with hundreds of thousands of kilograms of products available for purchase by weight, brand, style, size, material, and more.
At Fleek, we're not only doing the hard work of bringing large physical businesses online for the first time, we're also launching technology for companies further down the path.
The company already provides its customers with predictive analytics that help predict various trends. (Sure, this should be programmed to tell buyers to look for things that were popular 20 or 40 years ago.) Aids in quality control and increases protection against counterfeiting You can imagine more AI tools coming to help us do this, which both agree is a big problem in the world. An industry they want to help stop.
Another area where more capabilities are likely to be developed is faster logistics around purchasing, shipping, and receiving, Agarwal said, especially for wholesalers, which have received positive reviews from buyers. He said that this would speed up logistics.
“We want to build technology to bring in more buyers, bring in more sellers, and continue to empower these entrepreneurs on both sides of the market,” he said.