ThredUp is buying its way to a bigger resale future in Europe.
The Oakland, Calif.-based company inked a deal to acquire Remix Global, which last year logged revenues of $33.9 million and gives the company an instant presence and base of operations on the other side of the Atlantic.
Expected to close in the fourth quarter, the deal price includes $28.5 million, subject to some adjustments, and $6.5 million in restricted stock units that will vest in four years and go to the Remix management team.
ThredUp went public in March on the Nasdaq exchange, where it now has a market capitalization of $2.6 billion, and is using its stock as a currency to help accelerate its global ambitions.
Remix will stand as an independent business under ThredUp and will be led by chief executive officer Lyubomir Klenov, who will head ThredUp’s European expansion
James Reinhart, cofounder and CEO of ThredUp, said: “Lyubomir and his team have built a strong, lean, customer-first business, and they know how to deliver resale operationally across multiple markets in Europe. We’re bullish about the massive opportunity in the European resale market and are thrilled about the chance to build on Remix’s technology and operational expertise to help accelerate its growth.”
ThredUp expects the deal will be dilutive to its gross margin and “modestly accretive” to its adjusted earnings before interest, taxes, depreciation and amortization in the near term. Last year, during the pandemic, ThredUp logged revenues of $186.0 million with gross profit of $128.1 million and net losses of $47.9 million.
The company, which helps consumers clean out their closets and sell their looks secondhand and also powers resale for outside retailers, is clearly still in growth mode.
And by targeting Europe, it’s going after a huge market.
ThredUp cited GlobalData estimates that placed the secondhand market in Europe at $21 billion last year — on its way to $39 billion by just 2025.
Remix, like ThredUp, has built a “single-sku” logistics platform that can process millions of unique pieces and would help in grabbing a bigger piece of that expanding market.
ThredUp has also been building in the U.S. through a resale-as-a-service program that recently cut deals with Farfetch, Madewell and Vera Bradley.
The company said the Remix deal would open up the potential for it to help brands and retailers in Europe get into resale as well.
Remix’s Klenov said, “Together, I believe we can build upon Remix’s core operational engine, technology and logistics to bring that scalable experience to the European market, where resale has only scratched the surface.”
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