UK-based Fleek has raised $25m to expand its servcie which powers the chaotic wholesale market behind secondhand fashion, where billions of garments are still sorted, graded and traded largely by hand. The round is all equity, with no debt. Fleek was part of Y Combinator’s Winter 2022 cohort.
The London-based startup’s Series B round was led by Burda Principal Investments, an early backer of Vinted, with participation from eBay, FJ Labs and H14. Existing investors, including Andreessen Horowitz, HV Capital and Y Combinator, also joined. The round takes Fleek’s total funding to $45m.
Founded in 2021 by Abhi Arora and Sanket Agarwal, Fleek is not trying to become another Vinted, Depop or eBay, but to power those companies with an underlying service, which will increasingly be powered by AI.
“The way to think of it is we live a layer above the likes of Vinted, Depop, eBay,” Arora said. “Resellers on those marketplaces, as well as physical stores selling vintage and secondhand, purchase on our marketplace from our group of vetted suppliers and then go ahead and resell to consumers.”
The company says it now connects more than 2,000 verified wholesale suppliers and graders with over 50,000 buyers across more than 100 countries.
Arora argues Fleek does not have an obvious software twin in the market, as opposed to the existing offline sorting system.
“There are no traditional exact competitors in our market,” he said. “We’re competing with traditional wholesalers or a very fragmented market of people just going to thrift shops or local markets to buy items and bring them back.”
“So far as we know today, there’s no direct competitor in this space that has built out a B2B marketplace for wholesale secondhand fashion,” he added.
The idea began during Covid, on Brick Lane in east London, when Arora walked into a vintage shop that was closing down.
“I was living in London, right off Brick Lane, and I’ve been an avid buyer of vintage clothes my whole life,” he said. “One evening, in peak Covid times, I was walking down Brick Lane and came across this vintage shop that was in the process of shutting down. They had a big clearance sale going on, so I went in and started buying some stuff.”
The shop owner was there. Arora asked why she was closing when the secondhand market was booming.
“What she told me was the biggest reason was Covid,” he said. “She couldn’t travel, which meant she couldn’t source. She explained the supply chain to me. She used to go around the world to these offline warehouses, where textiles discarded by consumers were being sorted manually, and she had to travel and bring those back physically every time.”
When travel stopped, the second-hand brokers moved in.
“These brokers had started popping up online on places like Instagram and WhatsApp,” Arora said. “She’d been buying from a few of them over the last few months and had just been scammed out of £20,000. Because of that, she couldn’t make rent, and she was shutting down. So that sparked the conversation. I called Sanket up and said, ‘Man, you’re never going to believe how vintage shops in London are sourcing vintage today.’”
The problem was that supply couldn’t meet consumer demand.
Fleek says up to 24bn secondhand garments move through the global secondhand clothing supply chain each year. Much of that inventory still passes through donation bins, textile sorting centres, graders, wholesalers and brokers before reaching retailers and resellers. The standards vary, and the pricing is opaque.
Fleek’s answer is “Fleek Sort”, a so-called ‘vision-language’ AI model trained on millions of transactions from its marketplace. The tool helps graders identify, categorise, grade and merchandise secondhand garments using photos or videos. Once processed, inventory is listed on Fleek’s marketplace, where the system handles pricing, search, recommendations and buyer matching.
The company says Fleek Sort is already being used in sorting hubs in Pakistan, India and Dubai, with pilots launching in the UK, Europe and the US.
Arora said the new money will go into the AI systems and the marketplace itself.
“There are a few things,” he said. “One is to continue doubling down on the AI infrastructure that we’re building for this AI-native marketplace, which essentially means hiring great people and expanding the buyer and seller side of the marketplace.”
The geography is central to the company’s pitch. Today, much of Fleek’s supply side is in Asia and the Middle East because that is where large volumes of Western used clothing are sorted. But Arora says the next phase is about using technology to push more of that work back into Western markets.
“Today our supply side is primarily in the East, which is how the supply chain of used clothing works,” he said. “Our markets, where our supply mostly comes from today, are Pakistan, India and Dubai, which is where most of the Western clothes are getting sorted today.”
“With the Series B, we’re starting to expand in the West as well, where some initial sorting is taking place for these clothes,” he added. “The AI technology that we’ve been building allows us to help start to re-shore this industry. On demand, we’re continuing to double down in the UK, Europe and now the US as well.”
That re-shoring issue also has a climate angle. The company says it has helped keep more than 12m items in circulation. Arora said Fleek has not yet commissioned official impact studies, but its internal estimates suggest the company has saved around 30bn litres of water and avoided about 23,000 tonnes of carbon emissions.
“Our mission for Fleek is to make secondhand first choice by empowering entrepreneurs,” he said. “By the function of making secondhand first choice, it has a lot of environmental impact. We haven’t done any official studies around it, but our team has calculated, based on available information out there, we’ve kept about 12m items in circulation over the four years we’ve been going.”
However, there is still a carbon cost in shipping used clothes around the world. But he argues the alternative is worse.
“If we weren’t bringing them back, they would probably have ended up in landfill somewhere, or being incinerated or burnt,” he said. “And if we didn’t bring them back and fill Western markets with secondhand fashion, what would be on the ships over would have been new fashion instead of secondhand fashion.”
