How an app selling secondhand clothes went from near collapse to worth $5 bn

The 2016 assignment was to spend five weeks with a startup called Vinted that was growing fast but struggling to reach profitability as a platform for selling secondhand clothes.

After just three weeks, Plantenga issued his advice: Fire most of the staff, rebuild the app and rip up the business model. He even suggested to the founders that they close all other offices around the world, and operate solely from Vilnius.

To Plantenga’s surprise, they agreed to everything.

“That was the moment I got scared," he said, “I felt responsible."

Plantenga stuck around, and was named chief executive officer a year later.

Today Vinted is changing the way millions of people shop and dress. In France and the U.K., its top markets, about one person in four is buying or selling on the Vinted platform. The app has a limited presence in the U.S. but is planning to make a big push there as soon as next year.

Vinted is now valued at 5 billion euros, equivalent to $5.26 billion, following a secondary share sale to investors including U.S. asset manager TPG in October. In 2023, Vinted’s revenue increased 61% year-on-year to €596 million, and it made its first annual profit, of €18 million.

The Baltic startup is challenging the view long held by most fashion brands that the secondhand market is a loss-making sideshow. Many of its customers say they don’t shop anywhere else.

“I used to love going shopping but I just don’t see the point anymore," said Fiona Summers, a 41-year-old charity worker from Whitstable in southeast England.

She said she recently found a coat from Superdry on Vinted costing 80 pounds, equivalent to $102—about a quarter of its brand-new price. She now wears luxury labels that she would have never bought new, and periodically buys entire wardrobes for her two children from sellers offering discounted bundles.

“I use it pretty much every day," she said. “Everyone I know has caught on to it."

Vinted is primarily a fashion marketplace where users post items for sale or scroll through a bottomless trove of products listed by others. Lately it has expanded into luxury fashion, books, toys and electronics.

Plantenga says his vision is to ultimately become “the Amazon of secondhand."

While the company has been rumored to be considering an initial public offering, it says there are no plans for one at the moment.

Vinted’s rise reflects surging demand both from shoppers seeking deals, and also from those who prize the sustainable values of secondhand over the perceived wastefulness of buying new.

“Vinted is normalizing secondhand," said Natalie Berg, a retail consultant. “There’s a feel-good factor, you get the thrill of a bargain while being part of the backlash against disposable fashion."

Other secondhand companies active in the U.S. include eBay, Poshmark and Depop, which was bought by Etsy for $1.6 billion in 2021 and operates a peer-to-peer platform similar to Vinted. Fashion brands are also increasingly offering their own resale platforms in the U.S., but overall the secondhand-clothing business hasn’t taken off in the way it has in Europe.

Vinted began in 2008 when Milda Mitkute, then 22 and working in public relations, moved into a tiny apartment in Vilnius and realized that an online marketplace for used fashion could help people like her to free up wardrobe space and also earn some extra cash.

It quickly caught on. But building a business in a post-Soviet nation with no entrepreneurs was challenging.

The first time Mitkute heard the term “startup" was when Vinted won Lithuanian startup of the year in 2009. “I had to Google it," she recalled.

At first, the biggest challenge for Mitkute and her two co-founders was scraping together the €600 they needed to run their servers each month. But by 2016 the company had millions of global users, significant revenues—and mounting losses.

Facing ruin, they brought in Plantenga, a Dutchman who had a reputation for troubleshooting online retailers.

Plantenga helped them redesign the app to enable users to list items in as few as two clicks. But he says his main insight was to scrap seller fees and start charging the buyer instead, contrary to the structure of most marketplaces.

The approach may be catching on. In recent months eBay has dropped seller fees for some categories, including secondhand fashion.

Lean, bearded and with long blond hair, and wearing jeans and a Boho-style hoodie, Plantenga looks more yoga instructor than corporate executive. He often comes to work with his three-year-old poodle, Bimini, and is an avid surfer, skier and wakeboarder. His philosophy is to work intensely while in the building and then switch off.

“I think you should give it 100%, and after that you go surfing," he said.

Vinted’s quirky headquarters, opened four years ago, mirrors the CEO’s laidback style.

When the company moved out of its previous office inside an old Soviet factory that once produced cassette recorders, it brought many of the old fittings—elaborate lampshades, antique wooden closets—along to the new digs.

There are several nap rooms, a rooftop sauna, a room for playing video games, and a music room for jamming sessions complete with a mirrorball.

Vinted still has room to grow in Europe, said Plantenga, and is also busy building out a network of storage lockers, where users can deposit or collect packages, as well as developing its own payment system.

Vinted launched in the U.S. in 2020 and gained limited traction, but Plantenga said that is normal. In the U.K., the app launched six times and flopped, before catching fire on the seventh attempt.

“If I knew how to unlock the U.S., I would do it tomorrow," said Plantenga, suggesting another U.S. push would come sometime after 2025. “One day we’ll crack it."

Write to Trefor Moss at Trefor.Moss@wsj.com