To IPO or Not to IPO…That is the question for The RealReal!

“According to a recent article in Recode, Julie Wainwright, the founder and CEO of The RealReal, a luxury consignment business, was going to go public. An IPO (initial public offering) is the initial sale of stock offered by a company to the public. As a private company, the family and friends of the founder of a company as well as venture capitalists or angel investors provide funding. As an IPO, the company sells shares to others who want to invest in the company. Instead of becoming an IPO, Wainwright decided to raise new funding of $100 million.

Recode conjectured why Wainwright decided not to make The RealReal an IPO. One reason proffered was the footprint of the company in luxury consigning is not of sufficient scale to appeal to outside investors. Another is perhaps Wainwright wants to strengthen the business before going public, or maybe Wainwright and her initial investors want to increase the value of the market share of The RealReal by allowing the company to continue to grow. With her astute business sense, Julie Wainwright knows whether or when she will go public.

Julie Wainwright launched The RealReal in 2012, and while many of her competitors have folded, The RealReal has raised more than $173 million in venture capital funding. In a scant few years, The RealReal boasts 800 employees with offices on the west coast in San Francisco and Los Angeles, on the east coast in New York and D.C. and in the Midwest in Chicago. Her staff includes 75 individuals who authenticate merchandise including gemologists, watch experts, art curators, and brand authenticators.

The RealReal offers authenticated luxury merchandise with brand names like Chanel, Prada, Cartier, and Louis Vuitton. Items include clothing, shoes, fine jewelry, watches, and art. The RealReal has tens of thousands of consigners. The key to the success of RealReal is taking authentication seriously and guaranteeing the quality of the merchandise. Following authentication, items are scanned, tagged, or hung and available for sale online within 24 hours. The RealReal sells most items within 72 hours with a turnover of all inventory every 30 days.”

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