Used Clothing Site Tailors Big Name Series B Interest

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Santa Monica’s Tradesy, a peer-to-peer fashion marketplace, raised $13 million in a Series B financing round last week led by Kleiner Perkins Caufield & Byers, with participation from Rincon Venture Partners; Bee Partners; Northgate Capital; and Richard Branson, founder and chairman of London’s Virgin Group; among others.

Kleiner Perkins General Partner John Doerr will join the company’s board along with Stephanie Tilenius, an executive-in-residence at the venture fund.

Tradesy connects sellers of secondhand designer fashions to like-minded buyers, taking a 9 percent cut of each sale. It also provides packaging materials, recommends pricing and handles returns. The company plans to hire additional employees with the funding and to make technological improvements to the website. It wants eventually to broaden the categories of goods sold in its marketplace.

Tradesy, which participated in the Launchpad LA accelerator in summer 2012, raised $1.5 million in Series A funding months later, followed by a $2 million A-1 round the following February.

Founder and Chief Executive Tracy DiNunzio got the idea for Tradesy after founding Recycled Bride, a site where sellers could unload used wedding dresses. Buyers can now shop for secondhand bridal wear and wedding decorations on Tradesy.

“I actually wanted to start a marketplace for both fashion and weddings at first,” DiNunzio wrote in an email to the Business Journal, “but some very wise advisors told me to just laser focus on one small category, since I didn’t have funding or experience.”

DiNunzio said investors started to take notice once she made Recycled Bride profitable.

“With that first round of funding,” she said, “we were able to start building the team and launch Tradesy.”

The company said in a press release that it has 1.3 million members and the world’s largest selection of authenticated designer resale merchandise for women. The 30-employee company said sales were growing by 35 percent every month, with more than 50 percent of monthly sales coming from repeat buyers and sellers.

DiNunzio declined to disclose revenue figures for Tradesy or divulge the ownership stake offered to investors in exchange for the funding.

However, she described the company’s valuation in an email as “market-appropriate.”

The hefty capital raise is another positive sign for L.A.’s growing e-commerce sector. Earlier this month, online consumer rewards site Swagbucks in El Segundo raked in a whopping $60 million from Palo Alto’s Technology Crossover Ventures.

A report also emerged last week that El Segundo online fashion retailer JustFab is reportedly seeking $50 million to $100 million in pre-IPO funding and has hired Morgan Stanley to facilitate talks with investors. JustFab raised $40 million in Series C funding in September, led by Hong Kong’s Shining Capital Management.

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