Refurbished
24
Oct
2024
4
min read

Vinted secures €340 million investment and moves further into electronics

Vinted, the leading European second-hand marketplace, has completed a €340 million secondary share sale, securing investment from American global asset manager TPG and UK based Hedosophia. This transaction values Vinted at € 5 billion and marks a significant step in the company’s growth journey, diversifying its investor base and recognizing the efforts of its employees. The European secondary market is watching closely to see how Vinted’s recently launched electronics category will evolve. Industry players are wondering if this move will impact established marketplaces like Refurbed and Back Market. Secondarymarket.news had to opportunity to join Circular Summit in London this week. Back Market commented on Vinted strategic move into electronics at the conference without begin aware of this major investment.

€ 340 million investment fuels Vinted’s growth 

The secondary share sale was led by TPG, through its TPG Tech Adjacencies (TTAD) division, which focuses on providing flexible capital solutions for the technology sector. Other major investors such as Baillie Gifford, Hedosophia, Invus Opportunities, FJ Labs, Manhattan Venture Partners, and Moore Strategic Ventures also participated. Vinted’s existing institutional investors continue to back the company. The share sale not only brings in fresh expertise but also rewards Vinted employees and early investors for their contributions to the platform's success. Vinted CEO Thomas Plantenga expressed his excitement about welcoming new investors and their shared vision of making second-hand fashion the preferred choice worldwide.

Expansion into new markets and services 

In 2023, Vinted expanded into new markets including Finland, Greece, and Croatia, while enhancing its platform with a verification service for designer and luxury fashion items, which is now available in 10 countries. The company has also started rolling out a new category for electronics, marking its strategic move beyond fashion.

Back Market and Vinted

Back Market emphasized that Vinted is not yet a direct competitor. On Back Market, pre-owned devices are sold by carefully selected merchants who undergo regular quality checks and have a strong track record in the secondary market. Back Market focuses on selling refurbished devices, meaning they are fully inspected, repaired, and refurbished if necessary. In contrast, Vinted operates a peer-to-peer (C2C) platform where only secondhand devices are sold directly between consumers. Back Market highlighted that quality is a crucial differentiator for Back Market, with current defective rates below 4%.

Vinted’s verified verification model

However, Vinted recently introduced an Electronics Verification service, an optional paid feature for buyers to assess the functionality, condition, and authenticity of select electronic devices. This service is currently now only available in Poland and Lithuania. When a buyer opts for this service, the seller ships the item to a verification hub where partners test and verify the device. If the device passes the verification, it is forwarded to the buyer. If it fails, it is returned to the seller.

Sellers will see if their device is eligible for verification when uploading or editing a listing, and buyers will notice an Electronics Verification badge on eligible listings along with the service fee. Buyers cover the cost of this service, so sellers aren’t charged if it is selected during checkout. According to Vinted’s website, the service in Poland costs around € 4.50, which includes both the verification service and shipping to the verification center. Pricing for the UK and other countries will be announced upon launch in those regions.

Impact on the secondary mobile market

What the impact of Vinted entering this market will be needs to be seen. With this new verification service and the fresh capital injection and enormous customer base, they are in a good position to start dominating the unorganized secondhand electronics market. And according to recent research from CCS Insight this is still a massive market of globally around 45% of the total available secondary market.

Impressive financial growth in 2023 

The company’s strong performance in 2023, with a 61% revenue increase and profitability achieved, underscores its leadership in the second-hand consumer-to-consumer (C-2-C) fashion market. Vinted’s gross merchandise value (GMV) has grown 3.5 times since its last fundraising round in 2021 when the company’s pre-money valuation stood at € 3.5 billion.

Investors praise Vinted’s sustainable model 

TPG’s Andy Doyle emphasized the growing consumer trend toward second-hand fashion, driven by sustainability and flexibility. He praised Vinted’s customer-centric approach and its sophisticated logistics network, which has made second-hand fashion accessible to a broader audience. Doyle noted that TPG is excited to partner with Vinted as it embarks on the next phase of its European and global expansion.

Looking ahead 

With the support of TPG and other major investors, Vinted is well-positioned for continued growth. The company’s vision of making second-hand fashion the first choice for consumers, coupled with its ability to create a profitable, sustainable business model, reflects its leadership in Europe’s circular economy and the broader global second-hand market.

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