Dubai-based ‘The Luxury Closet’ has raised $8.7 million in growth funding, the startup announced yesterday. The round was led by Middle East Venture Partners (MEVP), and joined by Wamda Capital, Precinct Partners, TechInvest, Saned, and Equitrust. According to the publicly available data, this round takes The Luxury Closet’s total disclosed funding so far to over $20 million making it one of the best-funded startups of the region.
Founded in 2012 by Kunal Kapoor, it is a marketplace that allows users to buy and sell new and pre-owned luxury items including handbags, clothes, watches, and jewelry.
The startup currently has more than 20,000 items in its catalog over $5 million worth of products being added on monthly basis. More than 60% of The Luxury Closet’s sales come from the top end brands like Louis Vuitton, Chanel and Rolex who normally don’t offer any type of discount on their products. The Luxury Closet’s marketplace, allows users to buy pre-owned items from these brands and many others at a 60% discount (on average) from the retail price.
They offer a 100% authenticity lifetime guarantee for every product they sell which means if the product turns out to be inauthentic, The Luxury Closet refunds 100% to the customer including cost of return shipping. The startup achieves this by investing heavily in authenticating the product with their own in-house team.
The Luxury Closet plans to use the investment to “expand its supply from exclusive sellers in the Middle East multiple folds and to build out its network of buyers across the globe.”
“We see a massive wave building up in how consumers perceive and purchase luxury, one that is going to change the luxury industry forever. The Luxury Closet is proud to be leading the change of adding sustainability, and accessibility to the world of luxury in the region,” said CEO and Founder of The Luxury Closet, Kunal Kapoor.
The statement by The Luxury Closet quoting a Bain report explains that there are $500 billion worth of luxury goods sitting in closets all around the globe and that’s what they’re trying to focus on – to bring this untapped supply of luxury items online.
It further adds that Middle East & North Africa has the highest consumers spend on luxury in the world and the analysts predict the MENA luxury market to be worth over $12 billion by 2021 with the size of second-hand vertical going beyond $900 million.
MENA is the focal point of luxury for several categories and fashion products. It has the highest consumer spend on luxury in the world, which means the best and most exclusive closets. Analysts predict the MENA luxury market to be worth over $12B by 2021 and estimates suggest that the size of the second-hand vertical by itself can be upwards of $900M.