‘Every Shopper Will Be a Seller’: Tradesy Founder Tracy DiNunzio Talks Vestiaire Collective Merger

Keerthi Vedantam

Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.

Tradesy
Image courtesy of Tradesy

When Tracy DiNunzio had the idea to build a secondhand high-end apparel company, she bootstrapped the business by renting out her bedroom on Airbnb and sleeping on her living room couch.

It worked. Over the past decade, Tradesy—the Los Angeles-based, peer-to-peer secondhand clothing platform that DiNunzio built—gained 7 million members and hauled more than $145 million in venture capital funding. DiNunzio reclaimed her bedroom. And last week, the company announced it would be acquired by Paris-based Vestiaire Collective, another peer-to-peer luxury clothing marketplace.


“There are a lot of companies in fashion resale, but we're not really competing with each other so much as trying to change consumer behavior and compete with retail,” DiNunzio told dot.LA.

Tradesy

Image courtesy of Tradesy

Together, Tradesy and Vestiaire Collective boast 23 million customers and a catalog of some 5 million fashion items valued at more than $1 billion. The U.S. has quickly become Vestiaire Collective’s largest market, and the company is using the Tradesy merger to lay new roots in the States—with plans for a new authentication center as well as a technology hub, both located in Los Angeles. DiNunzio will serve as CEO of the combined company’s U.S. operations. (Financial terms of the deal were not disclosed.)

The acquisition feels logical given the parallels between the two companies. Both were launched in 2009 by women entrepreneurs. (Vestiaire Collective was founded by Fanny Moizant and Sophie Hersan; Moizant will serve as president of the combined company, while Vestiaire Collective chief executive Maximilian Bittner will remain CEO.). Both sought to compete in a market then dominated by eBay and brick-and-mortar consignment shops, which paid sellers a fraction of the profits they were making. And both adopted a peer-to-peer model by which users can sell and buy luxury goods through their websites.

The secondhand clothing market is expected to grow to $64 billion by 2028, according to CB Insights, driven in part by similar companies like Poshmark, The RealReal, Mercari and FarFetch. These companies are seeing rapid growth, and Tradesy and Vestiaire Collective are far from the only ones consolidating: ecommerce marketplace Etsy acquired secondhand apparel platform Depop for more than $1.6 billion last year.

But resale apps like Tradesy still have a long way to go before eclipsing retail. Buying secondhand clothing online is a less consistent experience than buying from a retailer, as even the most devoted of eBay shoppers will attest. The lack of quality control, along with unpredictable shipping and unscrupulous scammers, can make for an inconsistent experience.

On the sellers’ end, uploading photos, writing descriptions and pricing out items can quickly become a full-time job. When buyers complain about purchases—whether their claim is legitimate or not—it will usually result in a refund directly out of the seller’s wallet.

“Every shopper will be a seller in the future, but it has to be easy and it has to be seamless,” DiNunzio said. “The reason that every single person isn't selling every single thing they're no longer wearing today is because it's not easy enough yet.

As middlemen, both Vestiaire Collective and Tradesy need to be able to organize millions of unique items that are described and priced in different ways—a task as logistically challenging as it sounds. In response, the company plans to automate parts of the authentication process through its L.A. technology hub, which will complement the new authentication center in the city (Vestiaire Collective’s second authentication center in the U.S. and fifth globally).

Much like startups Rent The Runway and L.A.-based Rent-a-Romper (both of which focus on short-term apparel rentals), Tradesy and Vestiaire are part of a growing number of fashion platforms invested in the “circular economy.” The concept is rooted in offsetting the damage that “fast fashion” has had on the environment by focusing on resale, repairs and rentals.

“I think we'll see kind of a whole different concept of ownership, where everything you own is sellable whenever you're done with it,” DiNunzio said. “That seems like a better way for us to consume things, and it would naturally lead to people buying higher quality things that last so that they can resell them. And that creates less waste, less disposable products in the market and ultimately gets us closer to having commerce overall be more sustainable over the years."
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Hollywood Veteran’s Investment Firm, WndrCo raises $460M

🔦 Spotlight

Image Source: WndrCo

Jeffrey Katzenberg, known for his prominent roles in the entertainment industry, has redirected his focus towards technology investments with his firm WndrCo. Following the setback of Quibi, a short-form entertainment platform, Katzenberg and his founding partner Sujay Jaswa raised over $460 million in capital commitments for their Seed and Venture funds. With notable backgrounds in the entertainment and venture capital industries, Katzenberg and Jaswa manage $1.3 billion in assets through their Build, Venture, and Seed strategies.

The firm's Build strategy focuses on acquiring controlling stakes in tech companies like Aura and Pango to transform them into category leaders, while the Venture strategy targets founders reshaping industries, with investments in companies like 1Password and Airtable. Additionally, WndrCo's Seed fund invests in early-stage entrepreneurs, with a focus on startups innovating in areas such as the future of work, consumer technology, cybersecurity, and developer infrastructure.

WndrCo's recent fundraising success comes amidst a heightened focus on technology solutions that address previously unsolved problems, with a particular emphasis on artificial intelligence (AI). The firm plans to deploy its new funds to invest in innovative startups and create one or two new companies each year. With an average check size of $500,000 for seed investments and a growing interest in venture capital opportunities, the firm's investment strategy is tailored to capitalize on emerging trends in internet safety and AI-driven innovations, with a portfolio geared towards both innovation and protection.

🤝 Venture Deals

LA Companies

  • Mint Blockchain, a maker of an Ethereum layer 2 for the NFT industry, raised a $5M Seed Round from Jsquare, SNZ Capital, Antalpha Ventures, Mask Network, BlockAI Ventures, Predator Capital, GoPlus, Whitelist Ventures, and Panony Group. - learn more

LA Venture Funds

LA Exits

🏰 Disney's Epic Investment Stands Out Amidst Gaming Industry Layoffs

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

🏰 Disney's Epic Investment Stands Out Amidst Gaming Industry Layoffs
Disney

🔦 Spotlight

In the midst of widespread gaming industry layoffs, a glimmer of positive news emerges as Disney announces a significant move: a $1.5 billion investment in Epic Games. 🏰💰🐭

Disney's $1.5 billion investment in Epic Games, disclosed late Wednesday, signals a strategic alignment aimed at expanding the success of "Fortnite." The deal enhances Epic's growth prospects after financial setbacks, including layoffs, and strengthens the partnership between the two companies. With Disney gaining a larger equity stake in Epic, the collaboration will broaden the integration of beloved Disney franchises like Marvel, Star Wars, Pixar, and Avatar into the game, potentially boosting its appeal and longevity. This significant investment underscores Disney's commitment to interactive entertainment and signifies a shift towards games as a primary revenue stream, aligning with the growing trend of digital engagement among younger demographics. Moreover, the potential for crossover sales of physical Disney products within "Fortnite" and the exploration of new content distribution channels are just some of the opportunities arising from this partnership.

For LA tech, the Disney-Epic Games partnership represents a validation of the region's burgeoning tech and gaming ecosystem. The substantial investment in Epic, who maintains a large Los Angeles office with 1,000+ employees (according to LinkedIn), reflects confidence in the LA’s talent pool and innovation potential. Additionally, this partnership between two industry giants fosters an environment for further collaboration, investment, and growth within LA's tech sector. As Disney and Epic Games deepen their ties and explore new avenues for content integration and distribution, it not only elevates the prominence of LA as a tech hub but also stimulates economic growth and job creation in the region. This partnership highlights LA's unique position as a hub where technology and entertainment converge. With its ability to integrate diverse industries, LA is driving innovation and expansion in digital entertainment. 🚀💸🎮

🤝 Venture Deals

LA Companies

  • ProducePay, a financing and marketplace platform for the fresh produce market, raised a $38M Series D led by Syngenta Group Ventures joined by Commonfund, Highgate Private Equity, G2 Venture Partners, Anterra Capital, Astanor Ventures, Endeavor8, Avenue Venture Opportunities, Avenue Sustainable Solutions, and Red Bear Angels. - learn more
  • Blush, an invite-only dating app that drives users to local businesses on dates, raised a $7M Seed Round from individuals like Naval Ravikant. - learn more
  • Mogul, a startup founded last year that provides an overview of an artist's royalty earnings and identifies areas where money is owed but has not yet been collected, raised a $1.9 million seed round from Wonder Ventures, United Talent Agency, AmplifyLA, and Creator Partners. - learn more
  • Avnos, a hybrid direct air capture startup, raised a $36M Series A led by NextEra Energy and joined by Safran Corporate Ventures, Shell Ventures, Envisioning Partners, and Rusheen Capital Management. - learn more
  • AI.fashion, startup whose mission is to help retailers enhance the online shopping experience by providing consumers with virtual try-ons and personalized fashion recommendations, raised a $3.6M Seed Round led by Neo. - learn more
  • Suma Wealth, startup that aims to demystify financial topics and provide culturally relevant content, virtual experiences, and resources to help Latino users navigate financial challenges and opportunities, raised a $2.2M Seed Round . Radicle Impact led, and was joined by Vamos Ventures, OVO fund and the American Heart Association Impact Fund. - learn more
  • 222, a startup that helps users discover their city and meet new people through unique social experiences, raised a $2.5M Seed Round. Investors included 1517 Fund, General Catalyst, Best Nights VC, Scrum Ventures, and Upfront Ventures. - learn more
  • LimaCharlie, a security operations cloud platform, raised a $10.2M Series A led by Sands Capital. - learn more
  • Polycam, an app that uses a smartphone’s sensors to capture 3D scans of objects, raised an $18M Series A co-led by Left Lane Capital and Adjacent, and joined by Adobe Ventures and individuals like Chad Hurley and Shaun Maguire. -learn more.

LA Venture Funds

Actively Raising

  • ReelCall, Inc., an entertainment technology company focused on powerful apps and platforms that help build and maintain the professional network of connections vital to career growth, is raising a $850K Pre-Seed Round. - learn more
  • CZero, a startup building software to decarbonize logistics for logistics businesses and goods business through a vetted marketplace and optimization software. - learn more
  • Couri, a technology startup addressing last-mile delivery issues, is raising a $450K Pre-Seed Round at a $2.2M post money valuation. - learn more
  • Sweetie, a marketplace to help people plan date nights, is raising a $1.5M Pre Seed Round. - learn more
  • StartupStarter, an investment platform that provides real-time data and analytics on startups, is raising an $850K Angel Round. - learn more

If you’re a founder raising money in Los Angeles, give us a shout, and we’d love to include you in the newsletter!

Venture Waves, Climate Tech Wins, and Silicon Beach's Ongoing Evolution

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Venture Waves, Climate Tech Wins, and Silicon Beach's Ongoing Evolution

Anduril Seeks $1.5B in VC Funds

Defense company Anduril Industries Inc., based in Costa Mesa and founded by Palmer Luckey, is seeking to raise $1.5 billion in fresh funds to boost its valuation to $12.5 billion or more, according to sources quoted by The Information. This fundraising effort, if successful, would mark one of the largest venture capital rounds of the year.

Anduril recently secured a contract to develop and test small unmanned fighter jet prototypes under the Air Force’s Collaborative Combat Aircraft (CCA) program, beating out major defense companies like Boeing, Lockheed Martin, and Northrop Grumman. Alongside General Atomics, Anduril will design, manufacture, and test these aircraft, with a final multibillion-dollar production decision expected in fiscal year 2026. This program aims to deliver at least 1,000 combat aircraft to fly in concert with manned platforms and is part of the Air Force’s Next Generation Air Dominance initiative. Central to Anduril’s success in this contract is the Fury autonomous air vehicle, acquired through the purchase of Blue Force Technologies. This victory underscores Anduril's rapid advancement in the defense sector, aligning with Luckey's vision of building faster and more cost-effective defense assets. - learn more

Los Angeles Ranks Number 1 in Emerging Climate Tech Hub

The 2024 Emerging Climate Tech Hubs Report by Revolution highlights Los Angeles as a burgeoning center for climate tech innovation. LA's growth in this sector is driven by its diverse talent pool, strong research institutions, and a culture of environmental consciousness. The city's unique mix of legacy industries, such as entertainment and aerospace, alongside emerging tech companies, positions it as a pivotal player in the climate tech landscape. This shift reflects a broader trend of decentralized climate tech funding across the U.S., reducing the historical dominance of California's traditional hubs. - learn more

Silicon Beach: Looking Back, Moving Forward

Assessing the overall health of the startup market is challenging, especially as venture capital funding has decreased by an average of 61% from 2021 to 2023 across the top VC markets in the US. Markets with robust ecosystems in AI, SaaS, Biotech, Healthtech, and Fintech appear to be weathering the downturn better than those focused on Consumer and Gaming industries, areas where Los Angeles traditionally excels.

Percent Change In VC Funding By Region

CB Insights

LA Times paints a rather bleak outlook on the Los Angeles tech scene noting venture capital funding in Greater Los Angeles plummeted 73% from 2021 to 2022. Silicon Beach, once a vibrant tech corridor, currently faces high vacancy rates and lacks late-stage financiers, especially in the AI sector. However, there are positive signs, including growth in aerospace startups and increased venture capital investment in early 2024, suggesting a potential rebound for LA's tech ecosystem.

While LA may not be exceeding expectations during this period, its tech ecosystem warrants a nuanced evaluation, given the broader market dynamics and its strong performance in specific sectors. Reach out to us with your thoughts.

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