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Used clothing has exploded as a category over the past two decades. A London startup that has built a first-of-its-kind platform to improve how this highly fragmented industry operates is now announcing that finance is doubling that opportunity.
Flakean online marketplace that connects used clothing wholesalers with those who sell it at retail, has raised a $20.4 million Series A to further expand its platform. Flick says it has so far worked with about 10,000 sellers and retailers from 70 countries, transporting 2.5 million pieces of used clothing from 1,000 wholesale suppliers.
The investment comes from an impressive list of backers: HV Capital is leading the round, while Andreesen Horowitz (who led the startup’s seed round) and accelerator Y Combinator (where Fleek was part of the Winter 2022 batch) are also participating. Individual backers in the round include Shopify CEO Harley Finkelstein, former Depop CEO Maria Raga, and Postments CTO Sean Plaice.
Fleek was founded by friends Abhay Arora and Sanket Agarwal after a direct complaint from one of their future in-laws.
It was 2021, and the mother of Agarwal’s then-girlfriend, who was selling clothes on second-hand social commerce site Poshmark (now owned by Naver), was talking about sourcing problems due to supply chain issues at the height of the COVID-19 pandemic. . Separately, Arora, who had just completed an MBA at Cambridge, was living near Brick Lane in London, a major destination for second-hand clothing buyers, and went there to see what things were like.
He spoke with the manager of a vintage clothing store. The manager told him that used clothing wholesalers act as conduits for clothing, supplying inventory to many used clothing stores. These wholesalers were offline, so retailers tended to travel to source goods from wholesalers in person, rummage through the racks, and go “head down, butt up,” said Arora, Flake’s CEO.
This practice has become impossible with travel restrictions, but what this retailer has noticed is that a handful of wholesalers have begun showcasing their wares on Instagram, and have been negotiating privately via video calls.
This gave Arora and Agarwal, a software engineer who previously worked at Google, inspiration. They will build a marketplace to make it easier for any wholesaler to sell online, and for any retailer to buy that way. Make the experience consistent for everyone on both sides of the table and get a cut for providing the service.
Agarwal said Flake’s commission depends on the quantity and quality of goods sold: the reduction comes from the payments buyers make to wholesalers.
And then, when they started looking into who these wholesalers actually were, it seemed like fate.
“It turns out that the Indian subcontinent is one of the largest exporters and importers of used clothes,” Arora said. “Sanket and I grew up in India. We speak the language. It really helped us connect with these wholesalers.”
From basic necessity to virtuous circles and ancient sentiments
It wasn’t that long ago that used clothing was primarily the domain of low-income consumers: charity shops and donation points were the mainstays for collecting those items and redistributing them to those who needed them near and far… and sometimes very far. The whole process of eating and selling was quite a charade.
Over the years, this concept has undergone a major transformation, especially in more developed economies, where second-hand clothing – sometimes proudly referred to as “vintage” – has become special. Besides those who can’t spend a lot or just want to save money, there are shoppers who can afford new clothes, but choose used clothing to assert their individuality in a sea of mass-market goods. Or they buy used things to benefit from the circular economy and effectively reduce waste.
For those of us looking for a bargain on rough diamonds, prices may not be much different than new, and in many cases, much higher. The number of places that sell used clothes has increased. Charity shops now compete with more organized second-hand stores, and even big chains like Urban Outfitters and high-end high street boutiques tend toward a vintage vibe.
Along with this, there has been a boom in online sellers via eBay, Vinted, Poshmark, ThredUp, The RealReal, Depop, Instagram, TikTok and many more. Used clothing now makes up 10% of total clothing sales, according to a survey conducted by the company Global data And porridge up.
ECDB, an e-commerce data analysis company, estimated to be 68% Of all Gen Z and millennial consumers in the UK (a big market for vintage fashion) they bought at least one item used in the past year.
Fleck has customers all over the world who buy goods from its vendors, but according to Arora, the biggest suppliers are not individuals who donate their clothes to charity, but wholesalers, which in this case are very large warehouses that are the collectors and distributors of the finished garments. those items.
The wholesalers that Fleck tends to work with are in countries like Pakistan, India and Dubai, and they serve both the developing world (which is still the main customer for used clothing) and the developed world (where someone with a larger wallet can pay the same amount) or perhaps more for a great pair of used Levi’s vs. a new pair).
When I spoke to Arora and Agarwal that day, they were respectively in Pakistan and India visiting suppliers, and they said these wholesalers can typically handle up to 400,000 kilograms of clothing — receiving, sorting, repairing, cleaning and despatching. In one day. This may seem chaotic, but that’s what makes Fleek interesting: go to the site and you’ll see extreme organization, where hundreds of thousands of kilos can be purchased by weight, or by brand, style, size, material and more.
In addition to doing the hard work of bringing a massive, brick-and-mortar business online for the first time, Fleek also spins technology for those following that journey.
It already offers predictive analytics to clients to help them predict various trends. (Surely this should be programmed to only ask buyers to look for things that were popular 20 or 40 years ago.) You can imagine more AI tools to help with quality control and better protection against counterfeiting, something the two admit is a big problem in the industry. The industry they want to help stop.
Another area that is likely to develop more functionality is accelerating logistics around purchasing, shipping and receiving, especially around wholesalers that are evaluated favorably by buyers, Agarwal said.
“We want to attract more buyers, bring in more sellers, and build the technology to continue to empower these entrepreneurs on both sides of the market,” he said.
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