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Second-hand fashion site Vinted plans to expand beyond clothes into electronics, books, toys and video games as the profitable Lithuanian start-up seeks to capture more of the booming market for used goods.
Chief executive Thomas Plantenga told the Financial Times that, just as it had done with second hand clothes, Vinted wanted to focus on “unsexy” areas — such as efficient shipping and payments, as well as quality checks — for other used goods, starting with consumer electronics.
“In the end, our vision is to make second-hand first choice . . . globally, and [for] any type of product you can imagine,” he said. “In the long term, we would try to go to other categories.”
Earlier this year, Vinted became the first second-hand marketplace to become profitable.
On Thursday, it also confirmed a Financial Times report from September that it has been one of the few European start-ups to increase its valuation in recent years — from €3.5bn in 2021 to €5bn currently.
It achieved that valuation in a €340mn sale of existing shares to new investors, led by US private equity group TPG and also including asset manager Baillie Gifford.
TPG partner Andrew Doyle said: “When we first started tracking the company years ago we just hadn’t seen metrics like that in a long time.”
“They can build a very big business just on the utility of serving Gen Z and millennials’ day to day fashion needs, but the infrastructure they have built will allow them to compete on even more things like electronics,” he added.
The deal will allow some of the company’s employees and early investors to cash out some of their shares. All of Vinted’s institutional backers will remain as shareholders.
Big brands from Lego and Ikea to H&M and Zara have jumped into the second-hand business. But making money from thrifty consumers has not always been easy and Vinted competitors such as Depop and ThredUp are lossmaking.
“Valuations are moments of truth, and valuations are all about the economics,” said Plantenga.
He added that sales and profitability were likely to increase this year and next, as Vinted continued to focus on cutting costs on “unsexy things” such as servers, and running its own shipping operations.
He also hinted that the group could soon look at expanding into the US having already established itself in 22 European countries including — in the past year — Denmark, Finland and Romania.
“In the long term, we want to be a global company . . . In the next short period of time, Europe will be the place that we focus on. But in the long term this is going to change,” Plantenga added.
The Netherlands-born chief executive has turned the business around after joining in 2016 and becoming the boss a year later. It was lossmaking until last year.
He simplified its operations and centralised its technology, putting it on the path to become Lithuania’s first company with a $1bn valuation in 2019.
He described the latest share sale as “capital table hygiene” ahead of an eventual stock market listing. “Yet this is not something that fits into a very time framed plan, that we’re going to IPO within the next period of time. It is just hygiene along the way,” he said.
“We’re still really in this very high velocity building phase. So in that sense, we’re very happy to be private . . . There is no immediate pressure to go public. Yet, in the longer-term future, that will definitely be something that we’re going to do,” Plantenga said.