Failory - How Does Vinted Make Money?

Hey — It's Nico.

This month, I'm publishing articles analyzing different startups' business models. This week, we dove into How Vinted Is Making Money.

🙌 Welcome to the 557 founders who joined this week.

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What is Vinted? Vinted is an online marketplace where people can sell clothing and wardrobe accessories to one another, with an emphasis on used and vintage clothing, as the name implies.

Vinted’s goal is to make second-hand fashion the first choice for online shoppers, ultimately prolonging the lifespan of existing apparel and reducing waste related to the global fashion industry.

How was Vinted started? Way back in 2008, Lithuanian entrepreneurs Milda Mitkute and Justas Janauskas founded Vinted in Vilnius, Lithuania.

The initial idea for Vinted arose because Mitkute was moving and had too many clothes to take with her. Janauskas and her discussed building a website for trading used clothing items between peers, and thus Vinted was born.

The site became really popular within a short amount of time. Nowadays, Vinted has a user base of more than 45 million people globally and has a gross transaction volume of approximately €1.3B.

If you're interested in learning further about Vinted's story, check out the article.

How does Vinted make money? They have four main channels:

1. Buyer Protection Fee: Vinted charges buyers a fixed buyer protection fee of $0.70 on all deals, plus an additional variable fee of 5% of the total sale price. This buyer protection fee covers things like damaged or lost items, fraud, and more.
2. Closet Spotlight: Sellers pay $6.95 to use the closet spotlight feature, after which five items chosen automatically from the seller’s catalog appear in special spots on buyers’ news feeds for the next seven days.
3. Bumping Listed Items: This is another way for sellers to get more visibility for their wardrobes by paying a fee. The exact cost to bump an item varies depending on the item’s category, its price, the total number of items currently bumped on Vinted, and more. The fee can be anywhere from $0.05 to $5.
4. Third-Party Advertising: Third-party advertisers can purchase ads on Vinted's news feeds and listing pages through a self-service platform. Vinted charges advertisers different fees based on impressions and clicks.

How much money does Vinted make? As a privately-held, venture-backed company, Vinted is not required to and does not make its revenue figures public. The company’s last reported revenue, in 2018, was €​32.9 million.

How much money has Vinted raised? Vinted has raised a total of $562.3 million across six funding rounds. Most recently, Vinted raised €250 million in a Series F funding round in May of 2021. Notable Vinted investors include Accel, Insight Partners, Lightspeed Venture Partners, and EQT.

What is Vinted's ownership structure? Vinted is a privately-held company, meaning that its co-founders, executives, and investors each hold different stakes in it.

While it cannot be verified how much of a stake each of these individuals and firms has in Vinted, it’s likely that Platnega, acting CEO, is the largest individual equity holder. It’s also likely that each of the VC firms that have led funding rounds own significant equity in the company.

How much is Vinted worth? Vinted’s most recent valuation was $4.5B. Vinted surpassed a valuation of $1B in 2019, which would mean that the company has steadily risen in value by about $1 billion per year over the past several years.

Once again, here's the article. If you're interested in learning further about Vinted's model and financials, give it a read ;)

Last week we analyzed the business model of Peloton, the well-known Fitness startup. You can find the post here.

As every week, here are 3 recommended resources:

• ​How We Turned a Failed Product Into a $34,000/Mo Service: Devesh and Benji have co-founded a successful content marketing agency called Grow & Convert. In this article, they share their journey, which included several failures.
• ​Figma’s Layered Lessons: This week, Figma was acquired by Adobe for $20B. This article shares some thoughts on the event and lessons from Figma's story.
• ​Zapier: The $7B Netflix of Productivity: Zapier is an automation SaaS. This article dives into the business's model and founders' journey, including their financials and a valuation model.

Hope you enjoyed this week's article and curated resources ;)

Cheers,

Nico