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The boom in luxury resale comes with an expensive problem: fighting fakes. Grailed, a menswear-focused marketplace, just raised $60 million in funding to do, in part, just that.
- The Series B round was led by Goat Group, the sneaker resale giant; Gucci’s CEO and Groupe Artémis, the Pinault family's investment vehicle, also joined.
- Grailed now has 7 million users and more than 3 million product listings.
Remote control: CEO Arun Gupta told Retail Brew that counterfeits account for less than 0.5% of Grailed’s transactions. (Its community-driven platform runs the gamut from an $18,000 Saint Laurent suit to a $90 Off-White t-shirt.)
But while many resale companies use some sort of physical space to authenticate goods, Grailed’s process is fully digital—one that it aims to advance with the new capital.
- It currently uses a mix of machine learning and a “decentralized” network of moderators with expertise in key categories and brands.
“Because we do that, we reduce carbon emissions, and we do it so much more cost effectively,” Gupta said. “I can sell you a $400 item, and I make money, the seller makes money, and the buyer’s really happy.”
The big picture: Digital authentication has gained traction over the past few years—Goat and Fashionphile have dipped their toes in the tech—as resale companies look to compete in the saturated space. Japan’s Mercari even introduced its own remote authentication service that verifies products within 48 hours.
+1: Tradesy, another luxury resale marketplace, also announced $67 million in fresh funding yesterday.—JS