Investors poured billions of dollars into loss-making luxury clothing resale platforms. But the Baltic country’s first unicorn is turning a profit selling vintage looks on the cheap.
Thomas Plantenga bet on the future of Vinted in a television advertisement. The second-hand clothing resale app was burning a million dollars a month and had less than a year of liquidity left when Plantenga made an $800,000 bet on French television.
It was May 2016, and Plantenga had just been hired to save the eight-year-old Lithuanian startup . Founded at a college party in 2008, Vinted had grown rapidly as people in 10 countries used its platform to buy and sell second-hand clothes. But it was free to users, barely covering its server costs with advertising, and an attempt in 2014 to screw in a Poshmark -style 20% sales commission sparked a user revolt.
Traffic was reduced by almost half overnight. Plantenga, born in the Netherlands and who had never been to Lithuania, signed up for a five-week job as a consultant in May 2016. He became CEO of Vinted 18 months later.
«They had the best retention and engagement numbers I’ve ever seen. Then they applied the Poshmark model and everything fell apart,» says Plantenga, 40.
His prescription was hard medicine: He closed most of Vinted’s offices outside Lithuania, laid off half the staff and cut fees by 75%. «I became persona non grata in Vilnius: I was twice kicked out of an Uber because [the driver was] a friend of someone I fired,» he says.
His last recommendation to the three co-founders of Vinted — Milda Mitkute, Justas Janauskas and Mantas Mikuckas — was perhaps the most shocking. «I advised them to burn all their money on television, and a rumor spread that I had been hired by the competition to destroy the company,» he says.
After a television blitz in Germany, the app’s strongest market at the time, failed to squeeze out sales, Vinted was running out of options. Its founders, burned out, were willing to bet everything. «It was better to do something big and bold than die a slow death,» says Mikuckas, 39.
Camped out in Vinted’s office at the time, a cavernous Soviet-era avionics factory with rain dripping from the ceiling, Plantenga and Vinted’s co-founders watched anxiously as the numbers came in. They did not have to wait long. Within seconds of the French ads airing, downloads skyrocketed.
Seven years later, Vinted is one of the largest consumer markets in Europe, with more than $600 million in revenue by 2023. It now has 100 million users worldwide. Last year, it made its first annual profit — at least $20 million — setting it apart from its loss-making American cousins, such as The RealReal (valued at $360 million), ThredUp ($200 million) and Poshmark ( sold for $1.2 billion).
Vinted became the Baltic country’s first unicorn in 2019, when it raised $140 million at a valuation of $1.1 billion, and sales have increased six-fold since then. “Vinted is the leading company in this space by a wide margin,” says Deven Parekh, managing director at Insight Partners and a Vinted board member.
Vinted rates start at 70 cents and are capped at 8%. Rival platforms like Poshmark take a cut starting at 20%, but Vinted keeps costs down by putting the burdensome work of sorting, listing and shipping on its users. «You can upload it in three clicks, and there is no commission charged to sellers. They captured the market from the sellers’ perspective,» says Louise Deglise-Favre, an analyst at GlobalData.
Vinted’s eye-catching ad campaigns and streamlined signup process flooded the site with inventory. Plantenga’s tinkering also meant that sellers were frequently enticed to browse and then buy. A few clicks and a new coat or bag in the mail without the hassle of bidding at auction. «Thomas’ idea was that sellers were the most valuable thing on the platform, and you can’t tax them,» Mikuckas says.
Another key advantage, especially in urban Europe, where most people lack front porches for package delivery: Vinted offers cheaper deliveries to neighborhood stores that receive a small commission. Warehouses across Europe are full of clothes stuffed into garbage bags with Vinted labels (Plantenga’s no-frills budget isn’t enough for free packaging). Their young, environmentally conscious customers don’t care.
Beyond Vinted’s rival startups, there’s the granddaddy of online resale, eBay , which GlobalData estimates sold $11 billion worth of clothing last year. Vinted is less than half the size of Japanese app Mercari, which posted revenue of $1.1 billion last year.
Etsy sought to enter the clothing resale market with the $1.6 billion acquisition of London-based Depop in 2021, while European retailers Zara and H&M are building their own resale operations. Poshmark is now backed by South Korean search giant Naver, which bought the site in October 2022. Even Chinese fast fashion giant Shein, which produces $3 bikinis, got into the resale game in 2022.
These challenges, if anything, seem to inspire Plantenga, who sees an IPO in the cards. Going public would be a crowning achievement for this serial entrepreneur, who created his first company, a boat rental marketplace, in 2010. That business, started with a colleague from the Eindhoven University of Technology in the Netherlands, where he obtained a master’s degree in engineering, was a modest success, but it put him on the radar of OLX, Craigslist’s Dutch rival. As head of emerging markets, Plantenga transformed himself into an Internet market Mr. Fix-it, parachuting into Argentina, Kenya and Dubai to help build the classifieds giant’s revenues, which now stand at $1.6 billion. Dollars. «He is the best operator I know,» says Fabrice Grinda, co-founder of OLX and Vinted investor.
In 2014, Plantenga partnered with Grinda to start another Craigslist rival called Sell It, which they eventually sold to Spanish competitor Wallapop in November 2015 for a handful of shares. By then, Plantenga had built enough of a reputation for fixing things to get the pitch when Insight Partners investor Elodie Dupuy needed help with a faltering investment, Vinted.
Before Plantenga arrived, the startup had raised $60 million from big names like Insight and Accel after initial success as desktop word-of-mouth success. Vinted continued to boom after the trio of co-founders launched a mobile app in 2012 that gained traction among fashion lovers. But popularity did not translate into financial success.
After Plantenga’s shock therapy, the number of users and Vinted listings increased. But the business continued with assisted breathing. Plantenga, who had been left well beyond his initial performance without a contract, took the reins as CEO in November 2017 from Vinted’s exhausted co-founders. «We came together as a team, but breaking even was just the first step,» Mikuckas says. All of Vinted’s co-founders have now retired from the company.
The rise of e-commerce threw Vinted into a battle for Britain, Europe’s largest e-commerce market, with Etsy, which had just bought Depop. “If we hadn’t given it everything we had, Etsy would have figured out how to beat us,” says Plantenga, who poured more money into advertising and continued to refine delivery options until Vinted finally broke through in the UK.
Plantenga has no intention of wasting Vinted’s momentum. Denmark and Finland are just getting underway, and as befits a man who trained as an engineer, Plantega has a mathematical formula for plotting which country to head to next. At each new outpost, Vinted plans to hammer advertising and expedite shipping to make each user as active as those in their French heart. «Now it’s a machine that rolls with countries that have positive cash flow financing new countries,» he says.
A market that for now does not fit into its formula is the United States. There the market is fragmented between eBay, companies such as Poshmark and specialized players such as GOAT for sneaker lovers and Rebag for Birkin fans. «eBay was the leader, but it had so many weaknesses that all these rivals appeared,» says Oliver Chen, retail analyst at Cowens. «The question for the sector is whether they should all merge.»
That didn’t stop Plantenga from trying. Vinted made its first foray into the US in 2013. It failed. He tried again in 2021. It was not possible. Plantenga calls the US market «immature.» Earlier this year, it closed its operations in Canada. «If I knew what it took, I would do it,» he says, laughing at what seems to be a frequently asked question.
With America on hold, Plantenga set out to take Vinted upstream and grab a slice of the luxury resale market. He pushed for the recent $30 million acquisition of rival Rebelle, which has its own designer authentication team to fight counterfeits, in a move that should skyrocket Vinted’s average order size and commissions. «Vinted is a brand for normal people and normal clothes, but we were able to grow the luxury segment massively and quickly,» he says. «Fashion items that cost more than 1,000 euros are the fastest growing segment we have at the moment.»
I wouldn’t say it from Plantenga’s own threads. On a visit to Vinted’s headquarters in Vilnius, he sports a second-hand holey T-shirt and parachute pants. One thing missing from the office: clothes racks. «We’re a technology company, not a clothing company,» he says with a shrug.
