TPG, a US private equity firm, is currently negotiating to acquire a stake in Vinted, Europe’s largest second-hand fashion platform, which is valued at €5 billion. This move highlights the rapid expansion of the Lithuanian company, driven by increasing demand for pre-owned clothing among younger consumers.
According to sources familiar with the situation, TPG is looking to spearhead a transaction that would involve investors purchasing several hundred million euros worth of existing shares in Vinted, although no agreement has been finalized yet.
Established in 2008, Vinted was last appraised at €3.5 billion in May 2021. The company has been collaborating with Morgan Stanley to assess its capital structure, including the possibility of a secondary share sale in anticipation of a future stock market listing, as previously reported by the Financial Times.
The sale of existing shares would enable current Vinted shareholders, including employees, to liquidate a portion of their holdings, according to the sources.
Should the TPG-led transaction proceed, it would represent a significant increase in Vinted's valuation, particularly in light of the challenging venture capital landscape that has experienced a downturn following the pandemic-driven surge of 2021 and 2022.
Nonetheless, this development would reflect the growing consumer and investor interest in second-hand goods, as major brands like H&M, Ikea, Zara, and Lego venture into this market.
Vinted, based in Vilnius, recently achieved its first annual profit alongside a notable rise in sales, becoming the first online second-hand fashion platform to reach profitability, while competitors like Depop and ThredUp have faced challenges in achieving financial success.
Vinted reported a net profit of €18 million last year, a significant turnaround from a loss of €20 million in 2022. The company's sales surged by 61 percent, reaching €596 million.
Operating in markets ranging from the US and UK to France, Germany, and Italy, Vinted is establishing itself as a frontrunner in the sustainable fashion sector in Europe. The company expanded its presence to Denmark, Finland, and Romania last year.
TPG, one of the largest private equity firms with $229 billion in assets under management, has a history of investing in consumer brands, including India's Reliance Retail and Neiman Marcus.
Vinted aims to evolve beyond a traditional marketplace by enhancing logistics for consumer goods delivery. This includes the introduction of Vinted Go, a shipping service featuring dedicated lockers for customers to send and receive clothing.
The company has received support from various investors, including EQT, Accel, Burda Principal Investments, Insight Partners, Lightspeed, and Sprints.
Neither TPG, Vinted, nor Morgan Stanley provided comments on this matter.