The RealReal: Focused On Growth Now To Become An IPO Later

RealReal started out with a precision focus on women’s luxury wear at its inception seven years ago. The budding company left behind a flooded peer-to-peer market to become a front-runner in a different model of selling secondhand luxury goods online. In order to weed out fakes and present luxury items that are truly in their best possible condition, RealReal has established a professional in-house authentication team that vets every piece of merchandise a seller sends in to be sold on its site. One would think that might make RealReal the enemy of big luxury brands. However, it appears this is not the case. Sellers from RealReal seem to be going back to the same brand and purchasing an item of the current season at retail. From a business model standpoint, this is exceptional marketing. RealReal makes it easier to afford secondhand luxury names without the worry of authentication and puts more coin into the luxury brands at the retail end.

RealReal has since moved into jewelry, watches, home decor, art, and menswear. A New York City brick and mortar store potentially is in RealReal’s sights as well. All with the RealReal signature for authentication and attention to detail resale. So why another round of new investment infusion? CEO, Julie Wainwright’s pitching for a crisp new 100 million has a few people speculating why the choice to put off the companies initial public offering. One idea is that RealReal has not yet reached the peak of familiarity and allurement needed to become a traded stock. Another mindset might be private investors know that the luxury resale market is a bigger cash cow than originally thought. In this case, it would be more suitable to hold out on the IPO idea so RealReal can take another influx of investments to cultivate growth. Growth means securing a higher market share at the time of going public. As a result of waiting to become a publicly traded company, it gives RealReal the chance to prove itself as a top contender in the online luxury resale market. To achieve this, RealReal needs to etch out more of the fashion resale surge away from the very popular peer-to-peer market.”