For investors, the second-hand fashion sector has increasingly become a compelling arena – not only for resale platforms themselves, but for the innovations reshaping how fashion operates.
Startups that embed sustainability into everyday consumer behaviour are attracting notable venture backing. Faircado, a Berlin-based AI-powered browser extension that redirects online shoppers to second-hand alternatives, raised EUR 3 million in preseed funding led by World Fund, with support from Accel and General Catalyst. The company is using the capital to expand into new markets and to improve its image recognition technology, reflecting how investors see potential in tools that normalise resale at the point of purchase.71
Investment is also flowing into technologies that tackle bottlenecks in textile recycling. Refiberd, a US-based startup, has developed a system using hyperspectral imaging and AI to identify fibre composition at scale, making textile-to-textile recycling more efficient. The company won the CFDA × eBay Circular Fashion Fund, receiving USD 300 thousand in funding to scale its operations72 – an example of how grant-making and venture support are aligning to accelerate circular infrastructure.
On the platform side, recommerce marketplaces continue to show both opportunity and volatility. Depop reported strong growth under new leadership, with gross merchandise sales climbing from USD 600 million in 2023 to USD 789 million in 2024,73 helped by moves such as removing seller fees in its core market.74 This suggests investor confidence in resale platforms remains high when user engagement is strong and monetisation strategies are carefully adjusted.
Still, profitability remains uneven across the sector. While Vinted turned a profit of EUR 17.8 million in 2023 after years of losses,75 other major platforms such as ThredUp continue to struggle, posting hefty operating losses and facing mounting pressure to cut costs amid slowing e-commerce growth.76 The recommerce market is proving that scale is achievable, but sustainable profitability depends on efficient logistics, automation and consumer trust.
For investors, the lesson is clear: opportunities abound across platforms, technology and infrastructure, but selectivity is critical. The winners will be those companies that successfully combine consumer adoption with operational efficiency, while those trapped in cost-heavy models may face consolidation or decline.
