The RealReal said today it has closed on its largest funding round to date, $50 million in growth equity financing, bringing the online luxury consignment site’s total funding to $173 million.
The capital will be used to continue scaling The RealReal’s operations, open new luxury valuation offices and launch brick-and-mortar stores.
“Six years in, The RealReal continues to expand in exciting ways and this incremental capital will be instrumental in supporting the business and our continuous growth,” said The RealReal chief executive officer and founder Julie Wainwright.
“The RealReal has established itself as an innovator in the luxury category, delivering significant value to both consignors and buyers,” said Michael Kumin, managing partner of Great Hill Partners, who is joining the company’s board. “We are excited to work with Julie and The RealReal’s talented management team, leveraging Great Hill’s experience in helping scale leading e-commerce companies.”
“We’ll use the capital to really push brick-and-mortar integration with our online strategy,” said Wainwright. “We’ll open our first store in New York in the winter.”
Gucci, Chanel, Hermès, Prada, Saint Laurent, Tom Ford, Valentino and Cartier are among the brands sold by The RealReal. The company operates jewelry and watch valuation centers staffed by gemologists and watch specialists in several cities, including New York, Los Angeles, Chicago, San Francisco, Dallas and Washington, and more locations are planned.
Wainwright said the Manhattan store will offer all of therealreal.com categories, plus furniture and fixtures will be for sale. “We’ll do pick, pack and ship from the store,” she added. “We’ll have a cafe and a luxury consignment office in the store with gemologists and watch experts on site. The fine-jewelry and watch category has become a very big part of our business. It’s an integral part of our strategy.”
The ceo envisions more than one store in Manhattan. “We’ll have stores downtown and uptown,” Wainwright said. “We’ll roll out a few at a time and then go into rapid rollout.”
Wainwright declined to divulge The RealReal’s annual gross merchandise volume, but said, “Our goal is to reach $1 billion in the next couple of years.” An initial public offering is still a few years away, she said.
The site is planning to expand its operations overseas. “We always have international in our crosshairs,” Wainwright said. “Our lead is clear now. What we’re doing is disrupting.”
The RealReal in December launched pop-up shop on SoHo’s Greene Street to gauge the popularity of a physical store with its clients.
“We brought our experts forward during our pop-up test,” Wainwright said. “They talked to customers about why this Hermès Birken bag is better than that one. We brought in people who are more like fashion historians. They could call out a runway look from 2014 and say, ‘Here’s why it’s special.’ Half the people who walked in saw something they wanted and bought it at home that night. Others, had never shopped The RealReal before.”
Wainwright said she knew she had a strong concept when an NYPD beat cop walked into the store on the pop-up’s third night, wondering if some illicit activity had drawn such a large crowd.
Ohana & Co. was the financial advisor to TheRealReal.