IPO Boutique gives a free preview of the upcoming IPO, The RealReal Inc (REAL).
Company: The RealReal, Inc.
Symbol: REAL
Description: The RealReal is the world’s largest online marketplace for authenticated, consigned luxury goods.
Shares: 15 million
Price Range: $17.00-$19.00
Market Cap: $1.4b-$1.57bn
Trade Date: Friday, 6/28
Underwriter(s): Credit Suisse, BofA Merrill Lynch, UBS Investment Bank
Co-Manager(s): KeyBanc Capital, Stifel, Cowen, Raymond James
Terms Added: 6-17-19
Business: They are 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, they have cultivated a loyal and engaged consignor and buyer base through continuous investment in their technology platform, logistics infrastructure and people. They aggregate and curate 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. They have built a vibrant online marketplace that they believe expands the overall luxury market, promotes the recirculation of luxury goods and contributes to a more sustainable world.
Comps: Etsy Inc (ETSY), Farfetch Limited (FTCH), Ebay Inc (EBAY); Others listed below:
Financials: Their total revenue was $133.9 million and $207.4 million, and their net loss was $52.3 million and $75.8 million in 2017 and 2018, respectively. In the first quarter of 2019, their total revenue increased 49.1% to $69.3 million, and their net loss increased 64.6% to $23.2 million.
Market Opportunity: Theyparticipate in the large and growing personal luxury goods market, which was expected to reach $294 billion in 2018, and is expected to grow to between $362 and $412 billion in 2025, according to Bain. Luxury goods retain value over time as a result of their enduring desirability and durability, making them particularly well-suited for resale. The total addressable market of luxury products in U.S. homes potentially available for resale, including men’s and women’s apparel, handbags, shoes, watches, jewelry, high-end furniture and art valued below $250,000, is approximately $198 billion according to Frost & Sullivan. They are well positioned to benefit from several favorable industry and consumer trends, including the accelerating shift of luxury to digital channels, the increasing acceptance of resale, a rising value consciousness and a desire to embrace sustainability.
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