Tracy DiNunzio wants to kill fast fashion.
Founder and CEO of Santa Monica-based Tradesy, DiNunzio said over the last decade consumers are recognizing the harmful effects of low-priced, rapidly-produced fast fashion on the global climate. She argues that in addition to being environmentally conscious, buying and reselling high-end fashion items can also be affordable.
“We’ve always focused on luxury and it’s not because we love Louis Vuitton bags,” DiNunzio said, referring to the site’s most popular item. “We picked luxury because they’re the most durable goods that exist and have the highest and most resilient demand.”
Investors are buying into that mission.
Tradesy recently raised $67 million in a Series D funding round led by Foris Ventures. Since it was founded in 2009, the company has raised $149 million. DiNunzio did not disclose the company’s valuation.
The global secondhand luxury goods market exhibited “strong growth” from 2015 to 2020, and market research firm IMARC Group expects the market to grow at a compound annual growth rate of 10.3% over the next five years.
While some may dismiss luxury items as being only for the wealthy, DiNunzio said a marketing analysis done by the company early on showed the average household income for a Tradesy customer was $65,000.
There are other benefits, she said, noting luxury products tend to hold their value. For example, a consumer can buy a $500 bag, keep it for a year, then resell it for close to the same price a year later.
“We’re seeing that customers who might have thought luxury was out of reach are turning to resale and embracing resale,” she said. “Everyone wants better quality things and it’s just a matter of affording them.”
With the infusion of cash, Tradesy hired a new chief operating officer, Amy Gershkoff Bolles, who led the global data science team at eBay.
The company will also be continuing to develop AI and machine learning technologies so that the resale experience can be “seamless” for buyers and sellers and to create a “personalized and curated” experience for buyers, DiNunzio said.
It will also begin to invest more heavily into marketing, having mostly relied on organic growth in the past.
The market for lower-end secondhand clothing is also seeing a lot of action.
thredUp, an online consignment and thrift store, went public earlier this year at a $1.3 billion market cap. Etsy acquired Depop, a fashion resale marketplace targeted for Gen Zers, this summer for $1.6 billion in a mostly cash deal.
DiNunzio said Tradesy stands apart from its competitors because it is a peer-to-peer platform, so the company doesn’t hold any inventory, and luxury items have high average order value. It takes a 19.8% commission from sellers. They also authenticate online, eliminating the need for shipping.
“It’s just about the cheapest and lowest impact way for people to still get a fresh order whenever they want,” she said.