Thomas Plantenga, CEO of Vinted
Thomas Plantenga, CEO of Vinted: ‘Second-hand is still a drop in the ocean’ © Reuters

For years, Lithuania looked on enviously at Estonia as start-ups such as Skype and Wise developed links to the northernmost Baltic country.

But, recently, the southernmost Baltic state has had plenty to cheer about, largely due to Vinted — an online marketplace for second-hand fashion. The company was valued in May 2021 at €3.5bn, having become Lithuania’s first unicorn — or billion-dollar company — in 2019.

Vinted is now Europe’s biggest app for buying and selling used clothes. Over the past decade, it has struck out from Vilnius to conquer countries including France, Germany and the UK, with Canada and the US next on its list.

In the midst of the cost of living crisis, the company’s mantra of making “second-hand fashion the first choice” seems to resonate. While hundreds of other start-ups are slashing jobs, Vinted is one of the few still hiring.

“Second-hand is still a drop in the ocean,” says Thomas Plantenga, Vinted’s chief executive. Research suggests that second-hand fashion currently represents just 3-4 per cent of the total apparel market.

A shopper in Belgium consults the Vinted app
Old clothes, new business: a shopper in Belgium consults the Vinted app © BELGA MAG/AFP via Getty Images

Vinted must also compete against direct rivals, such as Depop in the UK, and general marketplaces, such as Ebay, as well as against retailers that, like H&M, have set up second-hand shops. But Plantenga believes the real competition is shoppers buying new clothes.

“Everybody is helping to develop the market,” he says. “The space is so big. What we see as the challenge is to convert people to a mindset to first look at second-hand before looking at new.”

Vinted was founded in 2008 by Lithuanians Milda Mitkutė and Justas Janauskas as a way for local women to swap clothes. It soon drew the attention of local programmer Mantas Mikuckas, who noticed how the website, with no marketing budget, had become one of the top 20 in terms of traffic in Lithuania.

He pitched a vision of expanding to Poland and Germany, using their personal savings, and soon Vinted’s international growth was under way. Carolina Brochado, a partner at EQT Growth, a Vinted investor, says this willingness to look outside a start-up’s home country early on is something venture capitalists appreciate.

“What we really love about Europe, and the mentality European entrepreneurs have to have from day one, is that they have to prepare themselves to go global,” she says. “If you’re coming from Finland or Lithuania, you have to prepare your whole infra- and regulatory structure to migrate into other markets.”

In 2013, US venture capital firm Accel became the first outside investor in Vinted, in a €5.2mn financing round that valued it at €19mn, following a detailed investigation into whether investing in Lithuania made sense. “We put Lithuania on the map,” says Mikuckas.

Other start-ups have followed Vinted’s lead, including Nord Security, a virtual private network provider that became Lithuania’s second unicorn, while other companies are close to that status. Mikuckas says all were “bootstrapped” — funded initially from personal savings and so on, rather than by outside investors.

Vinted itself has gone from strength to strength after a small wobble in 2016. It has more than 75mn registered users in 18 countries, most of them female and aged between 18 and 39. This year, it has launched in Slovakia, Hungary and — as of last month — Sweden.

Revenues in 2021 were up 65 per cent from the previous year to €245mn. In the first nine months of this year, they increased another 37 per cent, to €238mn.

“Most of us are in a position where we need to be more careful with money,” says Plantenga, referring to the cost of living crisis. But Vinted is still growing and looking to add to its 1,500 employees by recruiting “hundreds of people this year and next year,” the chief executive adds.

This year, Vinted divided its business in two, separating its shipping business Go from the marketplace. It is looking to make shipping easier and more sustainable for customers by creating a pan-European network of lockers, a system it is currently trialling in France.

“We want you to put clothes in a locker in the Netherlands and a woman in France picks it up,” Plantenga says. Vinted also sells its shipping services — which can connect logistics companies across the continent — to others. Customers for this service include a Lithuanian board games maker.

But the company is proceeding more carefully with expansion outside Europe. “Europe is our home, and we really understand that market,” Plantenga says, while such territories as the US and Canada are “quite different, the runway to success is longer”. He points to safety issues, shipping, and currency as some of the challenges.

Brochado says there is no rush to go for a stock market listing, as Vinted’s market leader status means the cost of acquiring new customers keeps falling as more people hear of it and list clothes for sale. “It’s a powerful funnel,” she adds.

Vinted is looking out for acquisitions, though. In August, it completed the $30mn takeover of Rebelle, a Swedish online marketplace for luxury fashion that includes authentication of clothes. That represents a departure from Vinted’s current focus on “regular clothes for regular people”, says Plantenga.

He adds that there are two main reasons for the deal: to move into higher-end fashion; and to improve Vinted’s trust and safety performance, possibly by extending Rebelle’s authentication knowhow to Vinted’s platform — so buyers can be sure the clothes being sold are what the sellers claim they are.

Brochado thinks Vinted has a lot of potential to grow, even in an economic slowdown. “There used to be a stigma to used clothes. But, for younger generations, the last thing they care about is if something is new,” she says. “They care about waste, about value, about something that is flexible. Vinted is unlocking the power of everyone’s closet, and that is very powerful.”

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