Tokyo-based Active Sonar, the startup behind the ecommerce firm, confirmed in a statement on its website that it has raised the amount from CITIC Capital, SBI Investment, and SBI Securities, with loans from Mizuho Bank.
Reclo allows owners of luxury brands to resell the items online via its platform. The platform enables owners to ask experienced appraisers for appropriate value and price of their items before reselling them online.
Second-hand branded items sold on Reclo include clothes, bags, watches, accessories, and jewelry. Buyers are attracted to the platform because some of the items can be priced as low as 90 per cent than the original price.
The platform also handles all the processes of selling online, such as receiving payments and shipping items to buyers, it said.
Since 2014, the startup has raised a total of $35.8 million in over three rounds. Mizuho Corporation and B Dash Ventures are existing investors in Reclo.
With the fresh funding and the backing of CITIC Capital, Reclo said it intends to further expand in China, where the luxury market has expanded to over 700 billion yuan ($97.7 billion) in 2017.
Reclo launched a Chinese version in October 2016, which boosted the company’s overall sales. It then established a local subsidiary in Shanghai last year when its China sales accounted for about 70 per cent of its total overseas sales.
The firm said China’s used luxury market has great potential because it currently accounts for just 1.4 per cent of the country’s luxury market.
“We see this as a winning opportunity and thus we accelerate our expansion in China,” Reclo said in a Japanese-language statement.
Aside from selling used luxury items, Reclo said it also plans to sell and collect branded products from around the world to build a global ecommerce platform.
CITIC Capital, one of the backers of the funding round, said in August that it raised $2.8 billion in its fourth China buyout fund, bolstering its ability to cut deals in the world’s second-largest economy.
The CITIC Capital China Partners IV, the firm’s biggest private equity fund to date, received “strong” interest from a mix of existing and new investors including pension and sovereign wealth funds, insurers and family offices.