RealReal Gears Up for IPO

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RealReal is gearing up to go public this week in its initial public offering. The company intends to price its 15.0 million shares in the range of $17 to $19 per share, with an overallotment option for an additional 2.25 million shares. At the maximum price, the entire offering is valued up to $327.75 million. The company intends to list its shares on the Nasdaq under the symbol REAL.

The underwriters for the offering are Credit Suisse, Merrill Lynch, UBS Investment Bank, KeyBanc Capital Markets, Stifel, Cowen and Raymond James.

This company is the world’s largest online marketplace for authenticated, consigned luxury goods. Management believes that it is revolutionizing luxury resale by providing an end-to-end service that unlocks supply from consignors and creates a trusted, curated online marketplace for buyers globally.

Over the past eight years, RealReal has cultivated a loyal and engaged consignor and buyer base through continuous investment in its technology platform, logistics infrastructure and people. The company aggregates and curates unique, pre-owned luxury supply that is exclusive to The RealReal across multiple categories, including women’s, men’s, kids’, jewelry and watches, and home and art. It has built a vibrant online marketplace that it believes expands the overall luxury market, promotes the recirculation of luxury goods and contributes to a more sustainable world.

RealReal participates in the large and growing personal luxury goods market, which was expected to reach $294 billion in 2018 and to grow to between $362 billion and $412 billion in 2025.

The firm gave a few business highlights for the 2018 full year:

  • We processed 1.6 million orders, up 42% over 2017.
  • Our average order value was $446, up 2% over 2017.
  • Our gross merchandise value (“GMV”) was $710.8 million, up 44% over 2017. Please refer to the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Metrics” for a discussion of how we calculate GMV.
  • Our net merchandise value (“NMV”) was $506.6 million, up 45% over 2017. Please refer to the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Metrics” for discussion of how we calculated NMV.
  • Our total revenue was $207.4 million, up 55% over 2017.

RealReal intends to use the net proceeds from this offering for general corporate purposes, including working capital, operating expenses and capital expenditures.


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