May 10, 2023
Less than two years after raising €10 million in a first round of funding, online retailer Wethenew, which started out as a specialist in the resale of limited sneakers, announced on May 10 that it had secured €20 million in a Series B funding round. The new company, which was launched in 2018 and claims to have passed the €100 million mark in turnover last year, will see the Singular fund, C4 Ventures, Chalhoub Ventures & Acquisitions and new business angels join its adventure.
“Singular has chosen to continue to trust us. We must have done something right,” smiles Michael Holzmann, who co-founded the company in Paris with David Benhaïm. C4 Ventures will bring us its extensive technical expertise. As for Chalhoub Group, it’s an opportunity for us to have an international distribution player. They have their own brand Level and they were very interested in our concept. We will be able to work together on opportunities in the Middle East.”
Although he says it with a smile, the manager admits that this new fundraising was initiated almost a year ago and the initial goal was around 15 million euros. It is therefore a much larger sum that Wethenew managed to raise. A real achievement in today’s investment and M&A market that has slowed down since the start of the war in Ukraine in February 2022.
“We’re very aware that this is not how most deals are going now days,” admits Michael Holzmann, who also notes that the €100m mark was a major goal for the duo when they started out. But we made an effort, drastically improving our profitability ratios last year. We optimised our logistics costs by changing service providers and reoriented our marketing investments. This has been an important task. But it is certain that between our two fundraisings, the context is totally different and that investors are much more sensitive to profitability.”
The company, which has more than doubled its sales and processed more than half a million orders in 2022, has considerably increased its staff to more than 120 people at its premises on the Avenue de l’Opéra in Paris. It clearly intends to expand even more. But are the founding duo staying at the helm of the company? Unlike in previous statements, the two entrepreneurs were not mentioned in the press release announcing the arrival of new shareholders, whose share of the capital will not be known.
“We will not share this information, the reason being that in the last two years, we have recruited high-level managers for logistics, marketing and of course, the technical side,” explains David Benhaïm. “Wethenew is now a much larger team. But we are still very much present and even more focused on development projects now that the fundraising is finalised.”
After having set up solutions to attract buyers, with marketing initiatives and substantial logistical investments to optimise its deliveries, and above all to attract sellers from all over Europe, in particular by offering them rapid payment solutions, the company still wants to accelerate on the technological side.
Developments in Europe and the Middle East
The fund-raising should enable the sneaker resale platform to expand its horizons. Geographically, it has already started to do so. “Our Spanish site is already active and we are launching sites in Germany, Belgium, the Netherlands and Italy in the coming weeks,” says David Benhaïm. “Last year, we worked to be able to scale up our model to the European level and duplicate it in different countries.”
The platform, which generates around 20% of its sales outside France, is aiming for a 40% share of its turnover to be generated internationally by 2026… with most likely some trials in the Middle East though Chalhoub Group’s networks. There is no doubt that the Wethenew spaces opened in Galeries Lafayette must have given the retail giant some ideas.
Another key point for the future growth of the platform is the expansion of its offer. It intends to triple its number of references. It will bring in about ten new brands. “When we started, Nike Jordan and Yeezy were in control of almost the entire market,” explain the co-founders. “Our culture is around these players. But now, even if Nike and Jordan remain very powerful, we can see that other players have scored points, like New Balance, and even players like Birkenstock are interested. We’re going to work with a dozen new brands like Hoka One One and Salomon. These are models designed for running, that people didn’t really wear, but these brands are doing a lot of work on their models. We can also see that, even if we are a resale player, the classic models work very well and are in our bestsellers.”
Wethenew, which has already developed collaborations with clothing brands such as Champion or Schott, also intends to broaden its proposals with a much larger textile offer. To do this, it will rely on its network of retailers, but may also form partnerships with brands to offer a full selection of clothing to its customers.
But by doing this, would the company be at risk of losing its identity as a sneaker retailer? “We’re going to continue to put forward streetwear culture. This is part of Wethenew’s success,” answers David Benhaïm. “And the investments in teams and technologies to develop our AI, our own CRM tools, will allow us to be competitive by offering the best prices, but also to provide content and specific product proposals.”
“We are very vigilant about broadening our offer,” says Michael Holzmann. “We don’t want to offer entry-level products. We started by making sneaker culture more accessible. We’re still doing that. Again, it’s our technological developments that allow us to integrate all these new products without friction in the experience for both sellers and buyers.”
A capacity to scale up that could make the French company want to grow externally. To accelerate, and with the help of its new funds, Wethenew could buy a competitor in France or another European market. The platform has made no secret of its ambitions to become the major player in the distribution of sneakers and streetwear online on the Old Continent in the coming years. Since the beginning of the year, its growth has been in the order of 30% to 40%, but its stated objective is to get closer to profitability. “Once again, mindsets have evolved,” says Michael Holzmann. “So we are adjusting our speed of growth with investment management and by keeping an eye on our return on investment. And if we can, we will accelerate!”
With 20 million euros, let’s just say that Wethenew has the fuel to do so.
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