The Real Future of the RealReal: How Big Will It Be Before It Goes Public?

“The RealReal, a high end fashion site that specializes in the sale of secondhand designer clothing and accessories, has tapped into a market that holds greater opportunity than its founder and investors imagined. Still, CEO Julie Wainwright is seeking another $100 million in new funding before the company might go public.

The RealReal is using this time to continue its growth, in scale, in the variety of products it offers, and even in the shopping experiences it provides its customers.

The company operates under a consignment model, where sellers ship their items to the RealReal in exchange for 50-60 percent of the proceeds once those items are sold. An in-house authentication team carefully examines each item before it is offered on the website to ensure that the items are not knockoffs. The RealReal has opened six valuation centers in different cities around the country to help its consignors process and get accurate price estimates for their items. More of these locations might be opening up in the future, since the site has expanded from only carrying women’s items to now carrying men’s products and home decor as well.

The RealReal recognizes that well some customers prefer to shop online, many still enjoy the experience of browsing around through a brick and mortar store and be able to leave with their treasured finds. The RealReal opened a pop-up store in Soho, New York for two weeks and earned over $2 million. This was about half of the customers’ first time ever learning about the brand. Wainwright laughed that when hundreds of designer bags line the walls, beating out the quantities carried by high end department stores like Hermes, it really draws a lot of attention. The RealReal is opening its first permanent store in Soho after this wild success, and more are definitely in the works for the future.

Wainwright also mentions partnering with some of the brands that the site carries. Many sellers actually drive sales to the brands rather than detract from them. For example, a seller might part with their Gucci bag and then will go and buy a new one. The RealReal is also a gateway for many brands to reach new people, especially younger generations. Once a customer purchases a product from the site and really likes it, that person tends to be loyal to that brand in the future.

Since its launch seven years ago, the RealReal has gotten over $170 million in funding over the years. With the site already making such big moves during this time, it will be exciting to see what it will have become by the time it goes public.”

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