The Luxury Closet, an e-commerce venture that sells used fashion items, closed an $11 million funding round as it expands its operations outside the Arabian Gulf.
The Dubai business, founded in 2011 by entrepreneur Kunal Kapoor, intends to use the capital to expand into Hong Kong following its prior acquisition in the city of an e-commerce website, Guiltless.com, it said.
The company did not specify when the acquisition of Guiltless took place or the value of the deal, or whether the purchase was made using the funds raised in this latest round. The Luxury Closet was not immediately available to provide clarifications.
"2019 is proving to be a very exciting year for us – the Luxury Closet has built one of the best catalogues in the world and we are now taking it international," said Mr Kapoor, who is also chief executive of The Luxury Closet.
“With the acquisition of the operations of Guiltless.com, it will provide us with a strong foothold in the rapidly growing Asian market and enable us to offer delivery and concierge services to our customers in Hong Kong.”
The $11m fundraising round was led by Knuru Capital, a new Abu Dhabi venture capital fund. Following the close, Knuru becomes a shareholder of The Luxury Closet, alongside Dubai venture capitalists Middle East Venture Partners (MEVP) and Wamda Capital.
Last year, The Luxury Closet secured $8.7m from investors led by MEVP, with participation from Wamda Capital, Precinct Partners, Tech Invest Com, Saned and Equitrust. MEVP provided some of the initial seed funding for the company.
The latest transaction contains a secondary portion that allows MEVP's seed vehicle, MEVF I, to provide its limited partners an initial return on their investment, the company said. MEVP still remains the biggest shareholder.
“The Luxury Closet is disrupting not only the $10 billion personal luxury consumption market in the GCC but also opening up ultra-valuable GCC [wardrobes] to a fast-growing global demand for unique pre-loved luxury items,” said Walid Mansour, partner at MEVP.
“Knuru’s investment underscores our bullishness and confidence in the success of The Luxury Closet.”
The Luxury Closet is an online marketplace for owners of luxury goods who want to resell them at a discounted price. Items on sale on the website are of fashion products by brands such as Louis Vuitton and Chanel, which do not otherwise discount out-of-season stock.
Delta Partners Corporate Finance acted as financial adviser for The Luxury Closet fundraising round, according to the company.