This company wants your used handbags - and it's heading for Wall Street

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The RealReal

TheRealReal

The RealReal's website.

Online consignment shops are quickly becoming one of the hottest things in the retail and tech worlds.

And now, one of these companies might be headed for an IPO, according to Fashionista.

That company is The RealReal, which sets itself apart by selling luxury goods like Chanel and Fendi bags.

"In theory, this is our last [fund] raise prior to an IPO," CEO and founder Julie Wainwright said to Fashionista. "That's where we're going."

The company revealed last week that it had raised $40 million in its latest round of funding led by Greenspring Associates, bringing its total funding to $123 million in funding, Fashionista noted.

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This announcement comes on the heels of the news that online consignment shop Poshmark had secured an additional $25 million in funding, bringing its total funding to $70 million. And in the fall, Bloomberg had reported that ThredUP had raised a total over $131 million, highlighting a round of $81 million led by Goldman Sachs.

ThredUP has also been securing partnerships with major retailers, including Macy's and Target, enabling customers to sell used apparel in exchange for store credits. The used clothes have to adhere to ThredUP's standards.

ThredUP appears to be attempting to change the perception of used clothing with its popular Instagram page, which shows of an appealing aesthetic.

All of this proves just how rapidly the used-clothing industry is growing. ThredUP recently released a report that estimates the used clothing industry will be a $25 billion business by 2025.

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"Growth in the resale market is expected to outpace all-ecommerce and retail sectors over the next 10 years," ThredUP's report says. 

Wainwright told Fashionista that The RealReal is reaching for $1 billion in annual sales within the next two to three years. And its IPO makes it look it might be a winner in the used-clothing race.

Some critics question whether the used-clothing market will be successful at all, however.

"I don't even know if there is going to be one winner," Forrester Research analyst Sucharita Mulpuru said to Bloomberg in the fall. "This model is never going to take over the world." 

And don't forget, there's one major competitor that nobody's mentioning: eBay, which Bloomberg noted in the fall had been working to make its processes more seamless.

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