Yerdle
Yerdle cofounder and CEO Andy Ruben
- Yerdle, a startup that works with traditional clothing retailers to offer quality resale items, announced $20 million in Series C funding on Thursday.
- Customers are increasingly aware of the environmental consequences of their clothing purchases - a trend responsible for the successes of third-party reseller apps like Poshmark and The RealReal, Yerdle cofounder and CEO Andy Ruben told Business Insider.
- Ruben compared Yerdle to a verified used car dealership that works directly with the original company to make a sale, instead of buying from an unverified user on a third-party app.
- Although its current slate of customers focuses mainly on outdoor gear, Ruben said the funding will help Yerdle expand in the luxury fashion business that is currently dominated by The RealReal, which recently went public.
- "The last time something this big happened to traditional
retail , it was ecommerce," Ruben said. - Click here for more BI Prime stories.
Used clothing and accessories is a billion dollar business, and a new startup is helping traditional retailers cash in.
On Thursday Yerdle, a startup that provides companies the infrastructure to sell used goods, announced it raised $20 million in Series C funding at an undisclosed valuation. Three Cairns Group led the round with participation from Commerce Ventures, DGNL, Prologis, Prelude Ventures, Claremont Creek Ventures, Lybra, and The Westly Group.
Where Yerdle differs from other used-clothing platforms is in the way it works with the original retailers - allowing them to take advantage of the boom in consumers buying used and otherwise pre-worn outfits. By helping those traditional retailers get in on the game, Ruben says, he's opening up whole new markets to them.
"The last time something this big happened to traditional retail, it was ecommerce," Ruben said.
Ruben highlights Worn Wear, Patagonia's resale brand, as a particular success story for his company. The Worn Wear brand, offered on Patagonia's website, is powered by Yerdle's software on the backend, helping manage inventory and logistics in a more specialized way than the rest of the retailer's technology platform.
Patagonia, which is known for its sustainable mission and advocacy work, was Yerdle's first customer. Now, Worn Wear accounts for a double digit percentage of Patagonia's revenue, according to Ruben.
"Yerdle is like a certified used car dealer," Ruben told Business Insider. "It's a better experience for the customer, because when you buy a Worn Wear item from Patagonia, all of that is like you are buying it from Patagonia."
Environmental impact
Customers are more open to buying used gear and clothing than in the past, in Ruben's view, because they are more aware of the environmental impact fast fashion can have. Where before, buying used clothing was seen as being mostly for reasons of saving money, it's now become a personal statement, Ruben says.
"There's an aspirational element among Millennials and Gen Zs and those brands might be out of reach," Ruben said. "You also have people wearing items fewer times because you see them on Instagram."
Ruben credits the success of third-party resale apps like Poshmark and newly public The RealReal to changing these customer tastes, but believes that there is room in the market for traditional retailers to take a piece of the pie in the market for used clothing.
That's especially true, he says, because retailers like Patagonia don't get a cut when you buy from those third-party sites. It makes it more important than ever for retailers to offer their own used-goods business, he says.
"If you are a retailer that is redirecting your customers to this third-party platform, next time they won't come to you," Ruben said. "You are handing customers over to a future competitor. It's so important that brands own the space because they still own the customer. Target wouldn't let Amazon run Target.com."
A selling point for Commerce Ventures, says partner Matt Nichols, was Ruben's experience running Walmart's sustainability efforts. Nichols emphasized that resale is the next major hurdle for clothing brands, and may unseat some of the traditional industry players the same way ecommerce did.
"It will be surprising when it happens, but not that it happened," Nichols said.
Ruben said the new funds will help Yerdle expand beyond outdoor brands like Patagonia into luxury clothing. Luxury items have been a major boon for apps like The RealReal, and he thinks this area is where brands have the most to gain by retaining customers instead of sending them to third-party apps.
"Brands need to take stock of what is happening at The RealReal, because that was a watershed moment," Ruben said. "Every month and quarter and year they wait, they are falling behind third-party markets that are taking away their customers."