New York-based fashion rental marketplace Pickle has raised $8 million in a seed round of funding. The platform allows users to earn passive income by renting out items from their closets. Originally launched as a social polling platform in 2021, Pickle pivoted to a rental service after realizing that users were recommending items they already owned. The company has experienced impressive growth, with a 55% month-over-month increase in revenue and a 90% customer retention rate after 12 months of joining. Pickle plans to use the funding to expand into new categories, new markets, and potentially open brick-and-mortar retail locations in New York.
Key Takeaway
New York-based peer-to-peer fashion rental marketplace Pickle has raised $8 million in seed funding to support its expansion plans. The platform, which allows users to rent out items from their closets, has achieved significant growth and aims to enter new categories and markets.
Pickle’s Evolution and Competitive Landscape
Pickle’s initial goal was to help users make better purchase decisions through social polling. However, the team discovered that users were often recommending items they already owned. This led to a pivot towards a rental platform that allows users to rent items from their own closets. The data-driven approach has helped Pickle achieve strong growth, with many users turning their side hustle in rentals into five-figure incomes.
While Pickle competes with rental outfits like Rent the Runway and Nuuly, it differentiates itself by not requiring a subscription. The platform’s sweet spot is below luxury fashion, with rentals mainly focused on middle-to-upper-tier brands. The rental prices are around 10% to 20% of the retail value, making it an affordable option for one-time wear, such as parties or weddings.
Pickle’s User Base and Collaborations
Pickle attracts a younger user base, primarily consisting of 22 to 35-year-olds, including students from the Fashion Institute of Technology and micro and nano influencers. The platform’s ties to social media enable collaborations with online creators, who often have larger collections. Pickle works with creators on a non-paid basis to optimize their Pickle closets and gain a following on the platform.
Expansion Plans and New Funding
Pickle’s recent $8 million seed funding, co-led by FirstMark Capital and Craft Ventures with participation from Burst Capital, will be used to accelerate growth, expand the team, enter new U.S. markets, and explore new categories of rentals. The company aims to allow users to rent high-quality household items, such as cameras, suitcases, sporting goods, and kitchen gadgets. Pickle also plans to launch its first retail space in New York and improve the user experience with a redesigned app.
The funding round was particularly impressive considering Pickle’s previous outside capital raise of less than $400,000. The company’s ability to achieve impressive traction with just two co-founders managing all aspects of the business, including product, engineering, marketing, customer acquisition, supply acquisition, and customer support, impressed investors.
Pickle is poised for further growth and expansion as it capitalizes on the popularity of peer-to-peer fashion rentals and taps into additional rental categories.
