Introduction
The funding environment for startups across the globe has been challenging over the past year. However, some sectors are still attracting investments as if it were 2021. In Asia, one such sector is the luxury fashion resale market, particularly for platforms that are witnessing an uptick in users and sales.
Kream Raises $168 Million in Series C Round
Kream, a reselling platform that allows individuals to buy, sell, and trade luxury goods like handbags, clothing, and accessories, has raised $168 million (220.6 billion won) in a Series C round. This investment values the company at approximately $742 million, more than double its previous valuation of $306 million in October 2021.
The new funding comes on the heels of a stellar couple of quarters for Kream. The company reports that its monthly active users have more than doubled to 5.3 million from 2.2 million last October. Additionally, its gross merchandise value shot up by 270% and 190% in Q3 and Q4, respectively, from the previous year.
Partners and Investors
The Series C round was led by Altos Ventures, a returning backer of Kream. Search engine and e-commerce giant Naver, SoftBank Ventures Asia, Mirae Asset Capital, and new investors Samsung Securities and Axiom Asia also participated in the round. This investment brings Kream’s total funding to over $266 million.
Use of Funds
Kream plans to use the Series C funds to make minority stake investments in its Asian peers. Chief Business Officer (CBO) Mingook Kim told TechCrunch that the company will primarily focus on investing in Asia-based reselling platforms, with the goal of strategically connecting these platforms so that Kream’s users can leverage them to buy and sell luxury items.
In addition to making new investments, Kream will also use the funds to add more luxury items and emerging brands to its platform. The company currently employs around 100 people and plans to expand its staff as it continues to grow.
Competition
Kream considers StockX and Hong Kong-based POIZON as its closest competitors in the luxury fashion resale market. Other notable players in the space include Rebag, The RealReal, and Vestiaire Collective.
Addressing Counterfeit Goods
One of the biggest pain points for C2C reselling platforms is counterfeit goods, particularly for luxury items. Kream’s CBO, Mingook Kim, acknowledges this challenge and states that the company is working to implement an inspection program to eliminate counterfeit products from its platform.
The inspection process involves sending a product to Kream’s inspection center after it has been listed on the platform. If the product passes internal inspection, the seller can proceed with selling their product to the buyer. However, once a transaction is completed between consumers, no refund is allowed. The buyer may, however, resell the item via the platform.
Differentiator
When asked about Kream’s differentiator in the market, CBO Mingook Kim stated that the company has focused on resolving two key pain points for customers: the reliability of products and inconvenient transaction processes. Kream claims to have secured the most data in South Korea to guarantee genuine products.
Market Growth
The luxury goods resale market was estimated to be worth $30 billion in 2020 and is projected to grow at 10% to 15% every year for the next decade, according to industry reports.
Conclusion
Kream’s Series C funding is a testament to the growing demand for luxury fashion resale platforms in Asia. As the company continues to expand its offerings and invest in new technologies, it remains well-positioned to capitalize on this trend.
