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Online Luxury Goods Reseller RealReal Sets Terms For $270M IPO

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Online Luxury Goods Reseller RealReal Sets Terms For $270M IPO

An online marketplace for luxury goods is bringing Rodeo Drive to Wall Street. 

The IPO Terms

The RealReal, Inc. proposes to offer 15 million shares in an initial public offering at an estimated price range of $17 to $19 per share.

At the midpoint of the price range, the IPO is expected to raise about $270 million.

The company, founded in 2011 and headquartered in San Francisco, California, seeks to list its shares on the Nasdaq under the ticker symbol "REAL."

Credit Suisse, Bank of America Merrill Lynch, UBS, KeyBanc Capital Markets and Stifel are among the underwriters for the offering.

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The Company

RealReal, an online marketplace for authenticated consigned luxury goods, facilitates the resale of luxury goods by providing an end-to-end service, unlocking supply from consignors and creating a trusted, curated online marketplace for buyers globally, the company said in its S-1 filing.

The company aggregates and curates a unique, pre-owned luxury supply that is exclusive across multiple categories such as womens, mens, kids, jewelry and watches, and home and art.

The luxury goods market is projected to grow from an estimated $294 billion in 2018 between $362 billion and $412 billion in 2025, RealReal said, citing estimates by Bain.

The Finances

RealReal reported revenue of $207.28 million in 2018, nearly doubling the $133.87 million reported for 2017. The net loss, however, widened from $54.92 million to $84.69 million.

Among other key metrics, the company had gross merchandise value of $711 million in 2018, with over 80% gross merchandise value from repeat buyers. It had 9.4 million in cumulative item sales, adding about 2.6 million new items.

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