The Luxury Closet raises $14m for expansion

Dubai-based online marketplace THE BLISSFUL LUXURY Closet has raised $14 million to expand its functions worldwide amid a coronavirus-induced surge in online sales and demand for recycled fashion.

The funding round was led by GMP Investments, the company said on Sunday.

Other backers include Dubai’s HB Investments, Saudi Arabia’s Nazer Group, Middle East Venture Partners and MLM Investment Company.

Create in 2012, The Luxury Closet resells luxury goods in 85 countries on its platform.

“The administrative centre raised will accelerate THE BLISSFUL LUXURY Closet’s already robust global growth with the company set to magnify its presence in markets outside the UAE and execute on a clear strategy ... within the international high-end luxury resale market,” THE BLISSFUL LUXURY Closet said.

Online shopping became popular after governments around the world introduced movement restrictions to avoid the spread of the Covid-19 pandemic.

Retail companies strengthened their digital businesses and realigned their businesses after the pandemic began.

E-commerce sales in the Mena region are set to triple from $8.3 billion in 2017 to $28.5 billion next year, according to analyze by Bain & Company and Google.

“Resale may be the future of shopping. We expect one in six transactions to be pre-owned by the finish of the decade,” said Kunal Kapoor, chief executive and founder of THE BLISSFUL LUXURY Closet. “This marks a paradigm shift in consumer choice and the value chain of the style and retail industry. What we are worked up about most is leading the industry to a far more sustainable and environmentally friendly future”.

Middle East Venture Partners, which focuses on early-stage Middle East start-ups, has backed THE BLISSFUL LUXURY Closet in each funding round.

“Being eco-friendly is indeed vital that you us as a family group and an organisation, and THE BLISSFUL LUXURY Closet advocates that by recycling luxury fashion,” said Mona Kattan, president of HB Investments.

“Having a platform that allows us to resell and buy luxurious items at an inexpensive cost is so meaningful to us since it opens up the accessibility to more people and in addition reduces the incentive to get counterfeits.”

Awad Capital, a Dubai Financial Services Authority-regulated company, acted as financial adviser to industry through the funding round.

Drake Star Partners, a worldwide investment bank centered on technology, also supported the online marketplace in the transaction.

Start-ups in the Mena region secured $1.03bn in funding this past year, 13 per cent a lot more than in 2019, according to data platform Magnitt.