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US private equity group TPG is in talks to buy a stake in Europe’s largest second-hand fashion site Vinted at a €5bn valuation, underscoring the Lithuanian company’s rapid growth amid rising demand from younger consumers for used clothing.
TPG is in discussions to lead a deal that will see investors acquire several hundred million euros worth of existing shares in the business, according to people familiar with the matter, who cautioned that a transaction had not been finalised yet.
Founded in 2008, Vinted was last valued at €3.5bn in May 2021. It had been working with investment bankers at Morgan Stanley to explore options for its capital structure including a secondary share sale ahead of a potential stock market listing, the Financial Times previously reported.
A sale of existing shares would allow current shareholders in Vinted, including employees, to sell some of their holdings, the people said.
If the TPG-led deal is completed, an increased valuation for Vinted would be remarkable against a backdrop of turbulent venture capital markets that have seen a slowdown since the pandemic-fuelled boom of 2021 and 2022.
But it would underscore the huge increase in interest in second-hand goods from consumers and investors alike, as big brands from H&M and Ikea to Zara and Lego explore the space.
Vilnius-based Vinted recently posted its first annual profit alongside surging sales, becoming the first online platform for second-hand fashion to break even as others such as Depop and ThredUp have struggled to make money.
Vinted made a net profit of €18mn last year versus a loss of €20mn in 2022. Sales increased by 61 per cent to €596mn.
The company, which is present in countries from the US and UK to France, Germany and Italy, has been positioning itself as Europe’s leading player in the sustainable fashion market. It started in Denmark, Finland and Romania last year.
TPG is one of the largest private equity groups with $229bn of assets under management. The investment group has previously backed consumer companies such as India’s Reliance Retail and Neiman Marcus.
Vinted is aiming to move beyond simply being a marketplace and wants to improve logistics for delivering goods between consumers through offering other services such as Vinted Go, a shipping service that has its own lockers for customers to deliver and collect clothes.
The company has previously been backed by investors including EQT, Accel, Burda Principal Investments, Insight Partners, Lightspeed and Sprints.
TPG, Vinted and Morgan Stanley declined to comment.
