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Vinted is weighing a secondary share sale that could be worth more than €200mn as Europe’s biggest online marketplace for used clothes seeks to be at the forefront of a sustainable fashion boom.
The lossmaking Lithuanian start-up, valued in May 2021 at €3.5bn, is working with Morgan Stanley to consider options for its capital structure ahead of a potential initial public offering, people familiar with the matter said.
The Vilnius-based group is debating all options including selling new shares as well as existing ones, the people said. It could even opt to stick with its current capital structure given the recent economic turmoil, they added.
A secondary share sale could value the Vilnius-based company at a premium to its previous valuation and help generate cash for early investors, the people said.
The discussions were still at an early stage and the company’s plans could change, they cautioned.
Vinted and Morgan Stanley declined to comment.
Vinted’s work with advisers from the US investment bank comes as venture capitalists increasingly look to the secondary market to help fund managers return cash to their investors while public markets have been shut.
Meanwhile, surging inflation and rising interest rates have coupled with concerns over climate change and a desire to be more sustainable, especially among younger shoppers. The conditions have prompted cash-strapped fashionistas in the US, UK, Germany, France and other countries to flock to Vinted’s website to buy and sell second-hand clothes and other items.
Growth in the market for used clothing might outpace fast fashion as shoppers become more aware of the environmental, social and economic benefits of thrift shopping. The $177bn global second-hand apparel market is expected to nearly double by 2027, three times faster than the overall market, according to a recent report by ThredUp, an online consignment and thrift store.
Vinted has touted its sustainability credentials, now a greater issue in a more than $1.5tn global apparel industry that is responsible for about 10 per cent of global emissions and which faces questions about the ethics of fast fashion that is often discarded quickly or never worn.
Founded in 2008 as a way for locals to swap clothes, Vinted in 2019 became Lithuania’s first unicorn, or company worth $1bn. Two years later it raised €250mn in a funding round led by Sweden’s EQT. Backers include venture capital firms in Europe and the US such as Accel, Burda, Insight Partners, Lightspeed and Sprints.
It has expanded to offer other options such as petcare, video game consoles, books and baby buggies. Last year it launched a shipping business.
The company is among those groups pushing to bring the used clothing market into mainstream shopping. It competes against UK-based Depop, and Vestiare Collective, in which French luxury group Kering owns a minority stake.
Rivals in the retail industry meanwhile such as Sweden’s H&M, with its garment collection scheme, and online retailers Asos and Zalando are keen to tap the nascent demand for second-hand fashion.
“Second-hand is still a drop in the ocean,” Thomas Plantenga, Vinted’s chief executive, told the Financial Times last year.
“What we see as the challenge is to convert people to a mindset to first look at second-hand before looking at new,” he added.
Revenues in 2022 rose 51 per cent to €370.2mn, while pre-tax losses narrowed to €47.1mn from a loss of €118.2mn in 2021.