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The Big Exit Show: Thijs Verheul and Sjuul Berden about selling their first-time startup United Wardrobe to Vinted

The Big Exit Show: Thijs Verheul and Sjuul Berden about selling their first-time startup United Wardrobe to Vinted

The sweet founder dream – starting with a few beers, building your first-time startup, and exiting it some hard working years later… Our newest episode of The Big Exit Show is all about that growth journey and hustling your way to the very final contract 🏆

While they were still in university, co-founders Sjuul Berden, Thijs Verheul and Thijs Sliijkhuis founded the vintage trading app United Wardrobe. After exiting to one of their biggest competitors Vinted last year, they now share their key learnings on the road to success. Take decisions fast, and move on even faster when you fail. Bury your ego because that’s not going to get you anywhere. And even though your dream is to conquer the world with your startup, maybe it is not always a good idea to expand?

Listen in to these juicy discussions, how mocking your biggest competitor might be a great exit strategy, and much much more.

Co-founders of United Wardrobe: Sjuul Berden and Thijs Verheul

In this podcast series Peak’s very own co-founder and managing partner Johan van Mil, and podcast-host Remy Gieling talk to successful European tech entrepreneurs about the exit of their company. You can find the episode at your favorite podcast platform, linked below.

And, if you are really interested listening to the big exit of specific founders – reach out to us so we can invite them for a next episode!

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You can find the transcribed version of the episode below:


Remy: Starting a company, that’s easy. Selling a company, that’s a whole different story. In the Big Exit Show by Peak, we lift the curtain of secrecy of selling ambitious scales by talking to successful founders who have been in this roller coaster. My name is Remy Gieling.

Johan: And I’m Johan van Mil.

Remy: And in this episode, we’re talking to two amazing founders, Sjuul Berden and Thijs Verheul. They started their online marketplace for secondhand clothing while still in school. And after six years, they had over four million users and sold the company in 2020 to the Lithuanian competitor Vinted. We will learn how to make an exit while working remote, but also about the dynamics between co-founders while preparing for the exit. In full disclosure Johan, you are one of the lead investors in United Wardrobe, right?

Johan: Fully correct.

Remy: So at the end, I’ll do the guesstimation. Thijs and Sjuul, so good to have you with us here today. Thijs, your final role at the company was officially head of influencer relations. And according to your LinkedIn page, it [00:01:00] says, “My goal is to sell the clothes of Beyonce and ASAP Rocky, but the dress of Michelle Obama will also do the job. By the way, if you know Rihanna, please send me a message.”

[laughter]

Remy: Did any of those people contact you, now you made a big exit?

Thijs: Yeah, Rihanna contacted me for a date but I told her no. And now, she’s with ASAP Rocky but yeah, she was constantly hitting on my phone but I told her no.

Remy: I can imagine. You can do better, right?

Thijs: Yeah.

Johan: Hey, so guys, what’s up? Because we know each other for a long time. What’s the heroic story of United Wardrobe? I would say, no, you’d better [crosstalk 00:01:40].

Thijs: Yeah. We wanted to make a secondhand fashion world wide’s first choice? No, our goal was the norm, for Vinted, it’s the first choice but we wanted to make secondhand fashion worldwide the norm conquering the whole world from the Netherlands. And yeah, [00:02:00] that was our goal, our mission, our statement, our vision.

Sjuul: Yeah. Yeah, we started at the university, scaled it up through the Netherlands. It had a good traction in Belgium and France going as well. And then after four or five years, Vinted came into the Dutch market. We started talking. We started to meet the guys. It was a good click. Therefore, I decided to join them and sell the company to them. And now, I’m making a secondhand fashion big globally.

Johan: And what’s the real story of United Wardrobe, Sjuul?

Sjuul: The real story is that back in 2014, I had an idea based on my sisters that they potentially would like to change secondhand fashion with other people, and that I needed a team. I knew Thijs, and I knew the other Thijs, the technical Thijs. And we just started to make a website. We didn’t know anything. We worked our asses off for six years in the hope that at some point, we would be able to sell the company for a bit of financial freedom, but it’s been a [00:03:00] crazy roller coaster where we had to lose a co-founder. We had to lay off people.

Thijs: Yeah, it was a roller coaster. And at the end, we kept on believing in our dream and our success. And it did happen but it was not necessarily always a fun ride.

Johan: No, it was not always up, right?

Sjuul: No. For sure, no. It never is.

Johan: Yeah, indeed. And I think what our listeners want to hear is indeed that real story, right? What happened there and what can they learn from it.

Remy: The beginning.

Johan: Hey, guys, when you started United Wardrobe, you were still in the university, right? In Wageningen.

Sjuul: Yes.

Johan: How did you do that? I mean, doing your studies, drinking a few beers, and then starting a company?

Thijs: Yeah, if I look back, it’s like, “What the f** did we do?” Yeah, it was constantly stressing, getting the studies done, getting United Wardrobe off the ground. For Sjuul, it was a bit easier doing the studies but for me, concentrating [00:04:00] and learning, it’s always been an issue. I still got my bachelor’s degree, but I did a year longer. And Sjuul just looked at the book for two hours. And then he went on doing his exams [laughs] but yeah, it’s so difficult to combine. Yeah.

Sjuul: Yeah, but you always managed to find a little two hours to just do something and work a bit on United Wardrobe back in the day. And then we had some help from the university as well. So I think it was like a 7.5-thousand-euro loan that we didn’t have to pay back in case we failed. So that gave a lot of security to us and some room to play. And at the end, we did pay it back because we did get follow-up investments.

So that also felt really good but yeah, that’s kind of how it got started. And we managed to stumble upon you, who became a co-founder who happened to know Thijs who really became our technical co-founder at the end. And yeah, Thijs, at that time, worked for low wages. He stared as just 3,000 euros to build this whole platform, or at least, the website [00:05:00] part of it. And with that, we launched. And from there, we just pivoted and kept on going, kept on going.

Remy: And vintage clothing is, these days, very popular. In 2014, well, it was maybe a bit shady. Even these small stores were only very poor people came to be. So how did you– [unintelligible 00:05:18]. So how did these three guys study in Wageningen thought this is a million-dollar idea?

Sjuul: Yeah. I don’t think we, at that moment, realized that this was going to be a billion-dollar business because that’s what it is, if you look at the big players in the industry at the moment. But we just figured or I just figured when I saw my sisters and how they changed clothing with each other that they would be willing to do that with other people as well. And that would be cool.

Remy: Yeah.

Sjuul: That was kind of the thing. And that’s the starting point.

Remy: And what was the problem you’re trying to solve because there were these other marketplaces in the Netherlands, and internationally like eBay and all these local [00:06:00] eBay escapades?

Thijs: It wasn’t safe. In the Netherlands, it wasn’t safe with all these Facebook groups, people are constantly whining that they got scammed on Marphas, they got scammed. And also, the whole inspirational part of just going to an app and have these thousands of thousands of products to view and get inspiration from to follow people, that was not around at the time.

Sjuul: Yeah, it’s a very common question to ask about a problem that should be solved but I think it’s about offering a superior experience for something that is already there. It can also be a business idea, right? So I think we just built a superior experience around buying and selling secondhand fashion by making it inspirational, by making it safe, by making it cool. So it wasn’t necessarily, in that sense, solving a problem.

Remy: How did you find your first target audience? Because you knew who your target audience was.

Thijs: Yeah.

Remy: How did you find them?

Thijs: Going around in the university, just getting people literally on the platform, telling them about it. And then–

Remy: But how did you do it? Did you walk around?

Thijs: Yeah.

Remy: And then just started chatting [00:07:00] people up?

Thijs: Yeah, but that was not really scalable so we found these Facebook groups. You had this vintage marketplace. And you had some clothing apps 00:07:06 like buying and selling clothes in Amsterdam. And in total, they had around 50,000 people already using it. So it was like United Wardrobe but then on Facebook– and we knew we have to migrate these people. So this is what we did. All the clothes that came in on these Facebook groups, we got those products and shared them in these groups. And me, and Sjuul, the only thing that we’re doing was we opened Google Analytics and we started sharing these products in this group all the time like literally, 10 hours a day, sharing.

Remy: Really?

Thijs: Yeah.

Remy: You were just like data, data entry basically?

Thijs: Yeah, you couldn’t really write a script for that because Facebook blocked all the scripts for automatically sharing at the point. And it worked so well. Like every time a cool item came in on the United Wardrobe, we shared in these groups. And around 300-400 people were clicking on that, going to register. And then we had all these free users.

Johan: This is actually what a lot of companies do, right? When they start, they just do this [00:08:00] or buy the Facebook group, and then they get the administrator rights, right? And then they just start let’s say spamming but just using their group and not too much, of course, because otherwise, the people will go away.

Thijs: Yeah, people leave.

Remy: People buy Facebook groups?

Johan: People who buy companies start buying Facebook groups all the time.

Remy: You’re just an admin and you pay them one thousand two thousand euros, and you say, “Give me the admin rights–

Johan: My mind’s blown.

Remy: –and EF access.” I mean, you don’t know that? Okay, that’s pretty funny.

Sjuul: Oh, with a couple of hundreds, you’re already there.

Thijs: A couple of hundreds? Okay.

Remy: So take us back to the first year. What was the first year like?

Thijs: I was still studying so the first half-year was still studying. The second half-year, we said, “Okay, let’s take a gap year. Let’s try to make this a success. Let’s see where we end.”

Sjuul: We got an office.

Thijs: Yeah, we got an office on De Kraats 00:08:43, so very, very cheap. It was a really good decision. Then we came together. We were sitting on our own office. It really felt cool. And yeah–

Remy: We were neighbors back then.

Thijs: Yeah, we were neighbors.

Remy: Yeah.

Thijs: Yeah, it was super sick in the old bank building.

[00:09:00]

Remy: Yeah.

Thijs: You had this hatch and you can pull out the hatch, and you can jump like two meters down in the sand. It was crazy.

Remy: Yeah.

Thijs: Rats everywhere. We got broken in there two times. They stole our cheese from a refrigerator, literally. [laughter] So funny.

Remy: Yeah. And the company that rented the place to us, they were too cheap to pay for the heating, right?

Thijs: Yeah.

Remy: So we had to have electric heating in the building.

Sjuul: We maintained that fight for three or four years.

Thijs: And it was crucial.

Sjuul: So after that, we got another one and we had the old postal office in Utrecht, city center of Utrecht, we rented for 500 euros. Every Friday, biggest parties there.

Johan: Yeah. That’s why I met you, guys. But yeah–

Sjuul: Yeah.

Johan: Yeah.

Remy: And Johan, you always talk about “the Hacker, the Hipster, and the Hustler,” right? Are these the stereotypes?

Johan: These are the stereotypes. And even Thijs made a song of it–

Thijs: Yeah.

Johan: –which is really good. You can listen to it on Spotify.

Thijs: Yeah, we’ll put the wardrobe.

Remy: Yeah, we’ll put the link in the show now.

Johan: Yeah, which is about the Hippie Hacker Hustler song.

Thijs: Yeah, yeah, yeah.

Johan: And you describe it really well.

Remy: For people who don’t know, can you explain what it is?

[00:10:00]

Johan: The hipster is a product guy, which loves and breeds the products, typically, Sjuul. Then you have the hustler who really sells the product, either markets a product but it’s really going out and pushing the product out there, which is really Thijs. And then you have the hacker, which is the other Thijs, which is not here, unfortunately. And he’s building the product. He’s really the tech guy or girl in the team.

Sjuul: Yeah.

Thijs: It’s logical that he is there. He’s building products. He’s building products. And he has a baby, yes? So–

[crosstalk 00:10:26]

Thijs: Yeah.

Johan: Hey, and as a first-time founders, guys, because you started the company, you’re really first-time founders.

Thijs: Yeah. It’s super sick.

Johan: How did you learn– especially in those early days, right? How did you learn those skills, what you need to set up a company and to, indeed, arrange offers, deal with founders, deal with investors—the angel investors—deal with everything you run into? How did you–?

Thijs: You just learn by trial and error all the time. You make stupid ass mistakes. And then you learn from that, and then move on to the next thing super quick, and [00:11:00] make quick decisions. We always were super quick in making decisions. And it was like, “Bang! Okay, we’re going to do this. Okay, it fails. Okay, next one. What you’re going to do next?” And yeah, learning is by trial and error. That’s the best lesson learned because you already have in your head, “I’m not going to do this because it’s stupid. I already know what’s going to happen.”

Johan: I think you had another approach, right?

Sjuul: Ah, not necessarily. So there is a problem and it needs a solution. And you just analyze what your options are. You pick the one you believe in most and you go. That’s what you do at any moment, I would say, when you start a new startup, or now when we’re investing in startups, yeah, you just analyze, think a bit, and make the decision, and go. And if it doesn’t turn out to be right, then you are wrong. [chuckles] Yeah, I don’t know. I think what that Thijs is saying is, it’s very true. You need to just decide. That’s the most important thing. And then stand behind your decision and try to make it the best.

Johan: I think you’re more of the [00:12:00] thinking guy, and then analyzing, and then acting on, and Thijs is more of the doing guy, right?

Sjuul: Yeah.

Johan: That’s always what I a lot in working with you, guys, because I think the brain and thinking and doing, I think that’s a very good combination, right? What founders should have in that team.

Sjuul: Founders need to be complementary.

Johan: Indeed.

Sjuul: So you don’t need to start a company with three people with the same skills because you always need other skills.

Johan: Yeah. Yeah.

Sjuul: If I’m too slow in my decision making, Thijs would always notice and say, “Oh, come on, make a f** decision.

[laughter]

Johan: Yeah. What were some of the first people you hired? And how did you find them?

Thijs: Yeah, Rem 00:12:32 was the first guy. We found him via the friend of Thijs Slijkhuis. And this guy came on his first day. Literally, yesterday, we talked about it. The first day we had this major issue with the co-founder, we had to get him out and make a deal with him, and we started at nine o’clock with meeting with lawyers. It was his first working day, and he came in like, “Hey, guys. What should I do?” And we’re like, [00:13:00] “Just work on the homepage,” or something. And then at 6:00, we came in. He was still there and he was like, “I did some optimization, so how are you going?” And he was like sitting there with his hands in his hair like, “I don’t know if we can move on with this company. Maybe we just have to drop everything. I don’t know anymore.” [laughs] And we were in total panic mode. He was sitting there. He just finished his bachelor’s degree. He didn’t do his master’s degree because of us. And he was sitting there like, “What the [expletive] did I make?”

Johan: “What the [expletive] did I sign up for?”

Thijs: Yeah. [laughter] And now, he’s working for Vinted.

Sjuul: Yeah, he’s still with us, working with us every day. Great guy. And now, it’s Vinted. He’s very that we’re there, yeah.

Johan: Oh, wow.

[laughter]

Sjuul: Yeah.

Johan: What are some hires that that weren’t successful?

Thijs: Yeah, of course. You always have bad hires. And you also learn from that. And it’s not that they were bad people. They were just not– or they didn’t fit our culture, or we didn’t have the connection, eventually.

Johan: And now, how do you find out, especially when you’re a first-time founder, you don’t have that much experience in hiring people, knowing which ones will work and which ones won’t.

[00:14:00]

Thijs: As soon as you start doubting on people, I think– I’m not really the HR person but if you start doubting on people, it’s already too late. [laughs] Maybe– yeah, you can also– if you have somebody– you have a company, and somebody’s there, and you already had the conversations–

Remy: Between the two of you, who was the bringer of bad news?

Thijs: I was better in bringing bad news than Sjuul because Sjuul was a way more sensitive guy, but with the big bad news, we always did it together.

Sjuul: Yeah, we did. And in general, I’m quite optimistic and positive, so I can neglect that thing for a while. So Thijs would therefore be more a bad news bringer or be more realistic, sometimes, in things but when it had to be brought, I would take the ownership and tell people. Yeah, it’s the only thing you can do at such a moment, right? So just be clear and honest about the fact that you failed.

Johan: And what guys, especially, after when your co-founder left, right? And Thijs joined fully on board, and you had the tech [unintelligible 00:14:53] in an office, you were hiring the first people, et cetera.

Sjuul: Yeah.

Johan: What were, those days, the biggest challenge that you were [00:15:00] facing?

Thijs: Oh, that’s a great question. Development all the time, launching new features, new payments, chisel, bidding options or applications with an Android app and an iOS app making, uploading pictures, make it more easy to buy and sell clothes. Our servers went down all the time. We were working with these big influencers. And then they posted something, and we paid like a [expletive] of money for it. And then the servers went down for hours and we were crying in our beds, [laughter] and refreshing all the time, and yeah. And then Thijs Slijkhuis, together with his team, Rem and the other guys built sick back-end solutions for it and constantly scaling, finding new marketing channels, finding the right people for the tech team, for the marketing team, for the support team.

Sjuul: But actually, I think growth came quite naturally at that time. We had good ideas on how we wanted to improve the product but we had to–

Thijs: It really came naturally. We had to take some marketing steps to get it going but when the fire was [00:16:00] going, it came naturally.

Sjuul: Yeah, I think looking backwards, growth at that moment felt quite naturally because what we did is every month, we would invest the revenue of the previous month back into marketing. So if we did 10k revenue, next month, that was our budget. And then we did 12k revenue, then next month that would be the budget. And then 14, 15, and then endless. And then that was working. Thijs was putting away that money on Facebook or in the influencer marketing, and some other channels. I was focusing on product and all the other things that had to be done next to marketing. And it worked.

I would say maybe one of the bigger challenges at the moment was also around operations and how to manage CS, and how to involve them well and give them a piece of ownership because that was the moment that those things started to become relevant, because, before that, it was just a five-man company where everybody had a very clear role. I think to me, that was becoming one of the biggest challenges at that moment, so–

Remy: The growth phase.

[00:17:00]

Remy: You were bootstrapped until that point, I think. We’re you–?

Sjuul: Hmm. No, we had our–

Remy: No?

Sjuul: –angel investment indeed to get this going. Yeah.

Remy: Yeah.

Sjuul: But we were growing very efficiently at the moment. So we didn’t necessarily need the investment of Peak Capital at that time. We really wanted it to get the extra knowledge and to be able to go outside of the Dutch borders.

Remy: Yeah, because the question that I would to ask was when did you decide to look for serious capital?

Thijs: That was always Sjuul– was like, “Hey, we should get another investment. I think it’s possible right now. And I was like, “Yeah, let’s do it.”

[laughter]

Thijs: Yeah. Sjuul was already was way more into investment, venture capital and this whole world.

Remy: And how did he learn about that, Sjuul?

Sjuul: Just the internet. [laughter] Yeah. Yeah, there’s a lot of information out there. Even though I would recommend myself if I would be in that shoes again, do not look too much at the internet but find some people who have been through this phase and talk to those instead of [00:18:00] going to the internet because there are more learnings to be gathered there, I would say.

Johan: What were the sources that you were at that time reading, what you can recommend?

Sjuul: I wouldn’t actually know if I had– I just had like 10 or 20 articles, which I really liked, which I really tried to understand, which were from guys from Accel and from other big VC firms, and how they looked at marketplaces and what the most important metrics were, and all those things.

Johan: And how did you handle that VC trajectory to raise funding? So you convinced Thijs, which was if I understand, [crosstalk 00:18:30]–?

Thijs: Pretty easy, yeah?

Johan: Right?

Thijs: Really good. We’re going to get free money, okay. It’s just fine.

Johan: How did you end up–? Because I have a very funny story to share when we first met but that’s [crosstalk 00:18:38].

Thijs: Unmanageable team. [laughs]

Sjuul: Yeah, I just created a deck, sent it out to as much people as possible, and I hope that some would reply. [Crosstalk 00:18:50].

Johan: Yeah, and how–?

Thijs: And get media attention?

Sjuul: Yeah, it’s the press, I’m sure.

Johan: Yeah, and how was that at the time?

Remy: How many people did you send the deck to?

Sjuul: I would [00:19:00] say roughly 20.

Remy: Twenty. And just by of calls, emailing them?

Sjuul: Yeah. So I would look up comparable startups, which I would like, who invested in them and contact those.

Remy: Oh, yeah. One of those being Peak Capital.

Sjuul: Yeah, for sure, yeah. I think Peak Capital together with that VC firm from Berlin, what’s it called again?

Johan: Point Nine?

Sjuul: Yeah, Point Nine were the ones that I liked the most because I read the most about them, and they seemed experts in the topic that we were working on, which was growing a marketplace.

Johan: And how many of these reply, because you send them to 20? How many replies did you get?

Sjuul: We got good replies and we would call after them to make sure that they received it.

Johan: Hope you, guys, picked up the phone, right?

Sjuul: Yeah, indeed. Indeed. I was sitting there with Thijs who’d say, “Oh, it’s right out of the script,” and Thijs would call it, to be honest. [laughter] I feel a bit ashamed about it but–

Johan: And probably Thijs had the script and you completely ignored the script, right? [laughter]

Thijs: At the time, I really didn’t even know how [00:20:00] valuation works like literally. Of course, I know the percentage of a company is this worth, but how to get to a valuation that you had certain calculations for valuation, that GMV is such an important factor in this whole thing.

Sjuul: We didn’t know what GMV was, to be honest.

Thijs: No.

Sjuul: –which is not the revenue.

Thijs: No.

Sjuul: And that’s also maybe one of the reasons why we might have undervalued ourselves a couple of times.

Remy: Mm. Yeah.

Sjuul: Yeah.

Remy: Now, people often look at VCs as walking ATM machines like, “You said free money!” [laughs] What were some of the other benefits you were looking for in a venture partner?

Sjuul: Yeah, well, we didn’t know much about many things.

Thijs: In the end, the M&A process, merger & acquisition.

Sjuul: Yeah, but we didn’t care when we got the investments.

Thijs: Yeah, if you look back– but at that point, if you look back, VC can also really be your partner in merger & acquisition that what we had at the end when we sold the company–

Sjuul: Yeah, I would say we got most value out of the collaboration with the M&A. [00:21:00] I think in growing the company, I honestly would have preferred, looking backwards, a more hands-off investor instead of a hands-on investor. Yeah, you need to keep on sticking to your own plan because then, you feel your own plan way more, and you’re also way more resistant to failure and changes when the plan is not working out. Well, if you have really hands-on investors, it can also be– that you start to follow their plan too much, and that they get too much input in your company. And that’s actually having a negative impact, I think, on the growth of a young startup.

Johan: Yeah. So you as a founder should always take your own plan, right? And you have advisors and VCs, and people around you but you should always follow your own gut feeling and always on the–

Sjuul: For sure.

Thijs: When you’re young and you have the investors, you’re just like, “They’re the investor people.” They’re almost gods having money and you’re super scared like you don’t have any money. You live in the student room and like, “Okay, investors, what should we do?”

Sjuul: Yeah. Yeah.

Thijs: You know? And “Oh, they have all the knowledge because they invested.” [00:22:00] Every company is different, you know?

Remy: Expecting of cap size. Yeah.

Thijs: And as a young person, as a young startup founder, also me and Sjuul, we’re like, “Okay, the investors and– okay, what is the right thing to do?” But you always have to do your own thing but you also learn that from knowledge and just doing a lot.

And right now, if I would start a new company or investing in other companies, I would way more think of it; It’s like, “Okay, I really have this role and people really look up to you. It is important to realize that as an investor and as a new founder that if I now found a new company and I got some investments on board, I’m just going to tell them, ‘Hey, guys, this is the plan I’m going to execute it. Just give me some money and I’ll triple it, and let’s go,’ but I’m not going to listen too much if they say, ‘Hey, guys, maybe this. Maybe that.’” Of course, it’s good to get feedback but I think one of the big mistakes, the errors we made, is always in hindsight as we really sought out all the feedback, we took it way too seriously, I think.

Sjuul: Yeah.

Remy: What’s your take on it? [00:23:00] Because you’re on the other side of the table, Johan, can VCs be too involved?

Johan: Yeah, of course, of course. And I think it’s– that’s what– therefore, I fully agree with you both, that VCs are helping the company but it’s indeed their perspective, right? And they see this company but they are not there every day, right? They’re not running the company. You are running the company. So I think always, as founder, you should always take your own path and listen indeed to the different advisors and angels and VCs you have on board, but really decide on your own path. I think that’s really important.

Sjuul: Yeah.

Johan: And VCs also, as Peak is, can be really involved and really hands-on. And I think for founders, it’s also very good to say, “Right, this is our own plan like you also said a few times.”

Sjuul: Yeah.

Johan: And take your own path. And I think that’s key.

Sjuul: Yeah.

Johan: And especially, I think that’s learning what a lot of first-time founders experience, right? I think as you mentioned right now, you’re a second-time founder. You’ve been on that path before, so now you know, let’s say, this trick, right? It’s for first-time founders you see it a lot.

Sjuul: Yeah.

Johan: By the way, the funny story, which I wanted to share, on Thijs, [00:24:00] which is really funny and I think a big inspiration for founders raising money. We met at the first meeting at B. Amsterdam. I had a meeting with these two guys. And it was Thijs’s birthday.

Thijs: Yeah, yeah, yeah.

Johan: And you were having dinner with, I think, your parents at that time.

Thijs: Yeah.

Johan: But Thijs was– and he can be really bullish. He can be really high energy, which I like a lot because as you know, I’m also very high-energy but you can also, as I can do, be a little bit irritating. [laughter] So at that time, I think after 20 minutes, I don’t know, probably I said, “Thijs–” “Yes.” “–do you want to get investment?” “Yes.” “I think you should take a walk because if we continue to talk like we’re having right now, you will not get investment because you really irritate me, currently. So let’s–” I think I said, “Take a walk around the building or so,” what–?

Thijs: I don’t know.

Johan: So we had a short break in the meeting or whatever, right?

Thijs: We got some coffee, yeah, I went to the bathroom.

Johan: Went to the bathroom, et cetera.

Thijs: But it’s like when you’re having this meeting with investors, it’s like almost somebody’s talking about your partner, your boyfriend, or your girlfriend, you know?

Johan: Yeah.

Thijs: And they say, [00:25:00] “Hey, your business is doing this but are you doing this, and this?” is like literally saying, “Okay, your boyfriend or your girlfriend is just ugly, and–” [laughter] yeah, it feels like this because it’s like your baby girl, you build this whole company, and then somebody’s going to crack it down, and–

Johan: You got upset.

Thijs: Yeah.

[crosstalk 00:25:17]

Johan: And yeah, you felt offended, of course, which I can understand.

Thijs: Yeah.

Johan: But I think the big– sorry, I laughed a lot about it because this is a great story because you came back at that time–

Thijs: Mm-hmm.

Johan: –after it. And you completely turned around so you fully got that feedback and fully also understood it, and acted on it, right?

Thijs: Yeah.

Johan: And that’s the moment personally when I felt, because as you know, I act a lot of based on gut feeling. I felt, “Okay. These guys are up to something great, because they feel their company is their girlfriend but indeed if something happens, they can also change, right? They change their perspective and act on it.

Sjuul: Yeah. And that’s felt to me really, really personal.

Thijs: One of the most important things as an entrepreneur… now the lessons are coming, [laughs] no, it’s– yeah, you have to bury your ego because your [00:26:00] ego is not going to help you anywhere.

Remy: Is this also in your book, Thijs?

[laughter]

Thijs: Lesson– no, no.

Remy: There’s a book coming out, too. Yeah.

Thijs: Yeah. Oh, yeah. [laughs]

Remy: Takes a while.

Thijs: Yeah.

[laughter]

Johan: Yeah.

Thijs: Pre-order it now.

Remy: Did your relationship change? Because your roles changed over time. You were the CEO. You changed in all different roles in the company basically.

Sjuul: Yeah.

Remy: Yeah, even went to France–

Sjuul: Yeah.

Remy: –for a while, I think.

Sjuul: Four months.

Remy: How did the relationship between the three of you change?

Thijs: It really went natural, like this whole thing of who’s the CEO and who’s not. It was like, “Okay, for me, it was already clear that Sjuul was the CEO. He was the vision type of guy, and I was about daily execution, that my role was more COO-ish but not really– yeah, and also doing marketing, of course, and managing the office [laughs] but it changed, because I met Sjuul as a student. And we were not really– [00:27:00] we were just students talking. We’re not really friends but then, but we just became best friends because we were sitting in this office all the time seeing each other more than our girlfriends, or our parents all the time. And then you became my big brother, man. [laugher]

Sjuul: My little sister.

Thijs: Yeah. [laughter]

Johan: And I think the relation between– I remember, which is also a very funny story. I was in Paris at one time and I was sleeping. And my phone rang a few times. And Thijs called me at that time. I was just on a holiday weekend to Paris. And then Thijs called me. And he said, “Yeah, Johan, I will be, in five minutes, on BNR Newsradio and I want to ask everybody for investment for our company. Do you think it’s a good idea?”

[laughter]

Johan: And I said, “No, Thijs, don’t do it. Please, don’t.”

Johan: I think, Sjuul, you have way more memories of Thijs.

Sjuul: Yeah.

Johan: And also the other way around, but I think that’s great if you have that, and that’s what I like really in these guys. There are three completely different personalities but you are really open and also [00:28:00] direct to each other always. And I think you fully respect each other also, right?

Sjuul: Yeah.

Johan: Because also in the board meetings that we had and discussion that we had, and the great times but also the bad times, right? And the laying off people, et cetera, you fully complement and respect each other. And that’s why I a lot in founding teams, right? That’s because you see especially when it goes down and gets rough, then there’s a lot of tension and arguments, et cetera. And I never had that experience with you, guys.

Remy: So– yeah. I think you’ve known each other for a really long time now. I think you’re all very sincere. Thijs, you can an [expletive] but you’re very sincere. [Unintelligible 00:28:34].

Thijs: And sincere being an [expletive]. Yeah, yeah, yeah.

Remy: That helps. That helps as well. What do you consider your biggest challenges in this growth phase?

Thijs: Finding cheap influencers to work with, not enough cheap but efficient, well-working influencers, getting the whole Facebook, Instagram marketing thing going and scaling it up. And every time we spend like 25k a month, and then [00:29:00] we screwed up the budget to 30k. And eventually, it became less efficient, we’re like, “Oh, what we’re going to do?” And we went back and forth all the time with budgets.

Remy: And because it was a real marketing machine, right?

Thijs: Yeah.

Remy: You had to get the big thing with platforms, you had to get new users on.

Thijs: Yup.

Johan: Yeah, and United Wardrobe as those days, indeed, was very dependent, of course, on influences, right? Which–

Thijs: Yeah.

Johan: –worked really great in the beginning but at a certain moment, when influencer became more, let’s say, mainstream–

Remy: Yeah, and more expensive maybe.

Johan: And more expensive also, of course, we had to find other channels, right?

Sjuul: Yeah, indeed. Exactly. And I think that’s really where the biggest challenge was. We’ve been successful in the beginning with these Facebook groups and spamming there. Then we went to do Facebook clicks. Then we went to Facebook app installs. Then we went to influencer marketing. And that’s also the moment where we didn’t find the next channel anymore to keep this continuous inflow of new buyers and new listeners going. So we had [00:30:00] a healthy retention. We had a strong organic inflow. And therefore, we were still having a good growth rate but we didn’t have times three, times four yearly anymore. That was the biggest challenge on like your growing as a company, so there are many things and many fires everywhere but you also need to continuously search for new channels, or at least we had to.

Some companies have channels, which have way a bigger reach and way bigger maximums but our channels like Facebook and influencer are quite limited. And therefore, we had to search continuously. And that’s also where we missed a step. And therefore, yeah, are not the one that’s now the unicorn because we sold to Vinted. Otherwise, maybe we could have bought them in 2016. They were not doing that well and we were actually growing very fast at that moment. If we managed to keep that trajectory going, who knows? But–

Johan: And you mentioned already, Sjuul, you should follow your own path more, right? In that respect looking back, what are other things, looking back, especially from those days, what would you do differently?

Sjuul: Spend all the marketing in the Dutch Flemish markets instead of–

Johan: So they’ll start spreading out of–

Thijs: Almost [00:31:00] all startups are like, “We’re going to raise money to conquer the world because we have a product and it works in the Netherlands. Just give us a million euro and we’re going to scale it in euro,” like with a million euro in Europe, you’re going to be nowhere. If you have the Flemish part of Belgium, with a million euros, you can thank God for that but it’s just really going because of the Dutch market. For us, it could be 30 or 40 times bigger than where we were at that moment. We just stared our eyes blind. That’s international expansion, I think.

Johan: So you would focus more indeed on your home market and get a bigger share of wallet from the consumers there?

Thijs: Yeah, but it was logical because if we could get France or Germany going, we could get another round to five million.

Johan: Yeah.

Thijs: And then we get maybe Austria going or another market.

Sjuul: Yeah, but that is the biggest mistake that we made. We didn’t understand, if we get this company, what does it do to our market cap and how much is that realistic to invest in a market? We went with one million to France. It’s a potential one billion. That market is a potential one billion euro. You can invest 100 million [00:32:00] and you still make 900 million profit. We came with one million and thought we were going to going to get it. We didn’t get anywhere but we were lost before we even went there–

Johan: Mm-hmm.

Sjuul: –to be honest.

Johan: Yeah.

Sjuul: And we should have spent that one million that we got from Peak indeed in the Netherlands, or maybe, the Flemish part of Belgium, and build our story and build up proof that we can build something scalable, and then raise proper money to go to France. But it was a waterloo even before we went, I think so, France. It didn’t matter how well we executed it.

I also wonder, Johan, do you see this the same? You were there when we sent off to France with one million.

Johan: Yeah.

Sjuul: Did you think like, “Okay, these guys are going to make one million into one billion”? Was it some sort of hope?

Johan: Yeah. “I thought we could make that, of course. Otherwise, I wouldn’t have done it.

Yeah. For the, indeed, hindsight-looking, we should’nt have done it. I fully agree with you, but of course, we, as the investor, look at the valuation of the company. And the valuation of the company explodes when there’s more international proof, right?

Sjuul: Yeah.

Johan: And that’s indeed the next proof round to get to the next–

Thijs: That was the [00:33:00] reasoning behind why– behind it.

Johan: That was the reason we did it. But in the hindsight-looking, right, I think we flooded away a lot of money in these markets without actual proof, right?

Sjuul: Did you expect that with one million, it would never be enough to build a proper proof story of– for a market that size?

Johan: No, I would expect, yeah. But then, of course– and that’s a job of us as VCs, right? If we see some proof and more proof, then you just put in a little bit extra money. Then you get other VCs in, et cetera. That’s what’s happening then, right? But indeed, as we didn’t get enough proof at that time, we, of course, had to change our plans at that time.

Sjuul: Yeah, but then you also are out-of-*** as they say in Dutch–

Johan: Yeah, yeah, yeah. Yeah.

Sjuul: –to shoot again because you shot everything into this one market, France?

Johan: Indeed. Yeah. Yeah.

Sjuul: So I think then you get into quite a tough situation, which happened with us. So I think we should just not have ever put so much money on this one bet.

Johan: Yeah. Yeah, looking backwards, yes. I agree with you but indeed, at that time, when you were running the company and we thought this was possible to get in this market. And also, we saw of course at that time, Kleiderkreisel [00:34:00] in Germany.

Sjuul: Yeah.

Johan: We saw Vinted coming up. They were, at that time, of course, active in that market but we saw a potential there, right?

Sjuul: Yeah.

Johan: And I think we believed also that our story, and especially our story to users were at that time better than Vinted so that we could conquer the world.

Sjuul: And the whole customer lifetime value of French users, we just could not foresee that that was so much more lower than the whole Dutch users.

Thijs: Yeah. Yeah, but the lifetime value comes with market penetration.

Sjuul: Yeah, of course.

Thijs: And if you never reach a certain critical mass in a country, that gets–

Sjuul: We really didn’t know that at that time.

Thijs: No, no, we don’t know.

Johan: Yeah. Yeah.

Thijs: No, but it was just like, “Oh, we have all these French users and a user in the Netherlands is like, for us, 15 euros. So I’m going to buy this user for 10 cents. We’re making immediately 15 euros. It’s great! Let’s go!” And then all of a sudden, like, “Oh, but there’s also a competitor that’s even cheaper and they also already all use this. So they just install our app, upload some products, and they’re back to Vinted. Yeah, it was basically like that.

Johan: But I think the learning [00:35:00] for me is– Sjuul, to ask you—I’m so sorry—to rephrase your question. I think looking backwards, and it’s good to share, is indeed the dependency we had at that time on influencer and the fact that that effect faded out and that limited the growth and, indeed, the unit economics of the company at that time, and also we as investors because we’re also on the table. We were not able to find those new scaling profitable marketing channels. I think that looking in hindsight, I think that should have forces to other discussions at that time.

Remy: The exit.

Yeah, when was the first time you started discussing the possibility of the exit?

Thijs: The first day of launching, yeah.

[Laughter]

Thijs: Yeah, of course, the exit thing is like the whole romance in the startup world, you know? You start being inspired by the big players, of Facebook, and of course, Facebook didn’t exit but you hear like, “Oh, Thijs [unintelligible 00:35:55] is worth like this market cap.” And you’re like, “Wow! It’s amazing. It was just a guy [00:36:00] that has this idea.” And you start this company. You really think, “Okay. I’m going to put a website live. And then organically, it will reach to the sky in some point, and–” Yeah, it’s not working like that.

Sjuul: And then you sell it. Yeah.

Thijs: Yeah, then you sell it. Yeah.

Sjuul: Yeah, that’s the dream.

Thijs: But it’s this romance that gives you hope and gets you going. Of course, if you know what it really is to found a company, you would never found a company.

Johan: But then you still have to do it, right? And still have to sell it, but when was the first time–? I don’t recall, when was the first time that you, guys, decided to exit the company?

Sjuul: Yeah, we thought–

Thijs: We didn’t really decide, “Okay. Today, we’re going to sell the company. It was just a natural process of a lot of other companies that were like us like Chickfy was bought by Vinted before we exited. There were a lot of consolidation in the market, a lot of players merging with each other.

Sjuul: Yeah. Well, consolidation was about to happen. At least, that’s what we felt. So–

Thijs: Yeah.

Sjuul: –we were growing steadily, as I said, through the loyalty of our users and organic inflow but we also saw that [00:37:00] some of the players in in our market like Vinted, and also new entrants like Zalando and H&M was entering the market with way bigger wallets than we had at that moment. So we either had to go and join this battle of fast racing, and fast growth, and blitz scaling, and making sure you get network effects faster than your competitors, or we had to join one company being H&M, or Zalando, or Vinted themselves and join forces, and together, make secondhand fashion big globally.

So that was the decision to be made. And we actually ran both trajectories at the same time. So we started gathering interest from the market, see what we could raise. And at the same time, yeah, got a partner to help us with a potential exit. Yeah. And then that’s how it went. And at the end, we got several offers of which we accepted the one we felt best about and which was financially also good.

Thijs: And then we made a deal. And we were literally on the [00:38:00] day of doing the last check, the last–

Remy: Check in the box.

Thijs: And it was like, “Sorry, guys. We have to pause this whole process just for a couple of days because this corona thing is happening.”

Remy: There’s something with COVID, right?

Thijs: Yeah, COVID.

And then France was shutting down. And then we almost had the deal, and then shtoof! And I was like, “Sjuul, we’re going to never get at this point again. What should we do?” And then we just started building again from bottom up getting ourselves out of this depressed moat and just hustle back again. And eventually, Vinted just came back because we were sick-ass growing the whole COVID period but it was such a nightmare process. And it took so long.

Sjuul: Yeah, because we started roughly 12 months before that moment. And then at the end, the closure was six months later. So 18-month process.

Remy: And it’s such an emotionally roller-coaster, right?

Sjuul: Yeah, because startups are kind of zero or one, right? [00:39:00] It’s either you sell or your competitor outskills you at some point. And then they become the norm, and then they get the network effects. And then you’re not that valuable anymore. And Vinted did have the big pockets. It was on television, so of course– I’m quite rational. I kept believing it was going to happen but Thijs said he was at some point like, “Yeah.” And every birthday, people tell you, “Hey, have you seen this new competitor? It’s called Vinted. They’re on television.”

Thijs: Yeah, back in the days, we’re like the guys of United Wardrobe. And we’re cool and successful, and they’re like, “How’s your company going? It’s going so well. I see all these influencers posting about you.” “Oh, yeah, blah, blah, blah.” [laughter]

And then all of a sudden, it’s like, “Hey, I see this Vinted on the television. Do you know this company?” And in my mind, it’s like, “Of course. What the [expletive]? I know this company.” “Oh, yeah, we know them. And yeah, it’s a competitor. And oh, yeah–” Oh, it’s nightmare. And every time I went to my parents, they’re like, “Hey, Thijs, [00:40:00] we saw this Vinted. They were on television.” Every time, I had to explain to them. Oh, it’s terrible.

Sjuul: But you know, right? You know these processes, they’re going to take long and you know it’s not going to be easy ride. So we are quite clear the vision, like Thijs, he kept on focusing on the Dutch market. And he kept on focusing on growing there. We get them growing even though our competitor was quite aggressively spending on television, while I was taking care of the process and it’s [unintelligible 00:40:27] Max, our finance guy.

Remy: Max Hofland?

Johan: Yes, that great guy. [Unintelligible 00:40:31].

Sjuul: And Thijs was also fully focused on the technology. And [unintelligible 00:40:37] was kind of doing both. She can do everything. So we kept focusing on the business as well because [u 00:40:46] like hoping on this thing to happen because then, it won’t happen. They need to want you, right? You need to be the candy. And at the end, it worked out well.

Johan: Hey, what do you think, looking backwards, what was attractive for Vinted to [00:41:00] buy?

Sjuul: Loyalty of our user base mainly, I would say, like–

Thijs: The Dutch market.

Sjuul: Even with Vinted aggressively spending, and we did get their numbers, and they were growing but they were stretching out the market. We didn’t realize how big the secondhand fashion market actually is.

Johan: Yeah. Yeah.

Sjuul: We actually only had roughly 20 percent, let’s say, of it, of the 16 to 24-year-olds. And those also happily stick to us because they liked our product, they liked the experience.

Thijs: And there was the fun part. When they started on television, we were like, “Okay, they’re cheaper. They’re bigger. They have these sick-ass big pockets. What the [expletive]? They’re going to crush us.” That was the mood in the first weeks of those television campaigns.

Sjuul: That was your mood, Thijs?

[laughter]

Thijs: Everybody felt that in the beginning. Everybody had that feeling at the back of his mind.

Remy: No way.

Thijs: Of course, all employees, everybody felt that a bit to a certain level, but then they started doing these ads, and eventually, nothing happened. [00:42:00] And a lot of people Google for secondhand fashion, started using Vinted, then switched over to United Wardrobe because we already had the liquidity. So in the end, it was super great that they started this aggressive television ad campaign. And it’s super funny that it went that way because you never could figure out that they would stretch out this whole market, and this whole new segment of people who buy and sell fashion got activated in the Netherlands.

Johan: So your perception was that, at that time, Thijs, we’re going down with the Vinted ads–

Thijs: Oh, yeah.

Johan: –and your friends and family saying. “Thijs, have you seen Vinted?” And you’re– what was your perception at that moment, Sjuul, because they indeed the big– at that time, also unicorn competitor was coming indeed to your home market? What was your rationale? How did you respond to it, Sjuul?

Sjuul: I think we were quite well-prepared. The product was pretty much, I think, better than theirs because we had the supply at that moment. It was all working well. We had integrated [00:43:00] shipping. We had integrated payments. So I wasn’t that scared in that sense. I think our experience was more fashionable. Therefore, we were able to offer a better experience for our core user base. And yeah, I just looked at the data as well and just didn’t see a massive churn.

So it seemed like okay, as long as we’re able to keep our users in, we’re still able to acquire new users, then we’re going to be able to be fine, and yes, growth will become more expensive and more tough but it doesn’t mean that we are going to be on fire and we’re going to lose everything because there is some competitor on television all of a sudden.

Johan: But I think that’s a big strength that you have also, in these kind of roller coaster moments, that you always become very calm. Look at the facts, look at the data, right? And then base decisions on that.

Thijs: Sometimes, you have to be calm and steady. And sometimes, you have to be paranoid–

Johan: Yeah, indeed.

Thijs: –to survive in the business. Yeah.

Johan: Yeah.

Sjuul: No, I really admire that of Thijs like always taking action right away. [00:44:00] That’s something I definitely sometimes lack. And then you’d tell me, “Do it. Come on.” And then the action happens.

Remy: Let’s double back to the exit. Was it Vinted that asked you if you are willing to be acquired, or did you reach out to them?

Sjuul: No comment.

Johan: I think the funny thing, it all started at that time, if I recall right, Thijs, that he bullied Vinted on, I think, one international website but now that–

Thijs: It’s so funny, I literally– yesterday, Thomas Plantenga, the CEO of Vinted, he was in Utrecht yesterday. We had some beers and drinks with some team members and with another company they just acquired, Bloom in Amsterdam. And he was like, “Thijs, oh, man, you got me completely crazy. You, guys, were so small but we hated you so much. We just wanted you to shut down and shut up.” And yeah, it was so funny. I had this meeting with their CFO, [00:45:00] who is this super-intelligent financial guy, Vaidotas. I’m just sitting there and I was saying, “Vaidotas, we’re going to crush you.” And they just raised millions. And we only had literally a couple of 100k on the bank account. And I was like, “Vaidotas, we’re going to crush you.” And Thomas told me– he walked out of this meeting and said, “I had the strangest meeting I had in my whole life. This Dutch guy is completely crazy talking about Napoleon, talking about crushing us.”

Johan: But you mentioned that also in the press, right? You mentioned also that Vinted was a loser.

Remy: Yeah haha.

Thijs: That we will win the battle, et cetera. I recall, yeah. I thought like, “Ah, those are the old players and we the new players in the media,” of course, totally liked that story. It’s completely, of course, not true at that point.

Remy: Yeah.

We were just bragging about it and creating this whole bubble around us and get free publicity.

Johan: Indeed. But that was indeed your approach, right? [00:46:00] Sort of your way to get the attention of Vinted.

Thijs: Yeah.

Johan: And in this case, also, of Vaidotas and Thomas, right? What was your approach, Sjuul, at that time, especially to get into contact with Vinted?

Sjuul: Well, we were running a quite professional process, I think, together with Drake Star.

Remy: Drake Star is an investment banker, right?

Sjuul: Yes. Yeah. So they helped us with both trajectories. So–

Johan: You mean with that first trajectory? And the second, what do you mean a different trajectory’s funding? Like growth funding and–?

Thijs: Yeah. So Drake Star is like a broker for companies. For the young people listening that don’t know what an investment banker is, I didn’t know what it was, so basically, if you want to sell a company, just like a broker, they can do it for you.

Remy: Yes, like a realtor for companies.

Thijs: Exactly.

Sjuul: Yeah. When I got really convinced about Vinted is really when we went there, met their team, saw their Vilnius office, saw their vibes, 00:46:51], and really concluded that it’s really the same as you watch young people, very ambitious, trying to make an impact, [00:47:00] trying to do well for the world. It’s not just about money. It’s about making a change to it to a big industry. Yeah. It felt very naturally at that moment that this would be a very good party to exit with because it would mean that we would join something that we would feel at home at, because we also visited different companies. I can’t give names, but I didn’t nearly have that feeling there.

Johan: Yeah, because at that time, also, thanks to I think Drake Star as a partner but also your connections, right? We had different parties we engaged with, right?

Sjuul: Johan always says one buyer is no buyer.

Johan: Yeah, that’s my– a little bit, my–

Remy: That’s his line.

Johan: Yeah, yeah, it’s my line.

Remy: Looking back, do you agree with that, Thijs?

Thijs: Yeah, for sure. I’ve seen for the first time when we were actually selling what the process looks like from the other side, also when you’re raising, what the process looks from the other side because all of a sudden, I could see in Johan’s head. And I could see in Stefan Bary’s head and how they were like lifting us.

Thijs: And how did you think we were? We were so lucky that we were [00:48:00] doing good at the time of selling. And there are a lot of companies that have to sell because things are not working out. Indeed, the founders leaving, or a big player really takes over the market, or they’re just done with, or somebody dies. If you look at the whole spectrum, only around 20 to 30 percent of the companies that get sold are really doing well. The majority of companies that are getting bought and sold like something is wrong underneath the hood. And somebody died or some founders leaving, and– yeah, we were also super lucky that Vinted did this big round and did this whole wave of secondhand fashion came rushing over us.

Johan: And I think it actually helped, Thijs, that you bullied Vinted too, really. No, because I think that really helped. Of course, because you really pushed them to do something. And they knew us, and they knew, I think, all of us, right? And I think that really helped.

Remy: Who did the negotiations? Was it you, Sjuul?

Sjuul: Yeah. We offered– [unintelligible 00:49:00] I did it, Stefan Bary did it on behalf of the financial shareholders. And then there was Drake Star in between to make sure that actually, we are also aligned on what we want and who we want to work with, and who we want to sell to.

Johan: Because it’s always a sensitive topic, right? Because the financial investors, most part of the team–

Remy: Yeah.

Johan: –went with Vinted. And of course, they were really eager to work with them.

Remy: Yeah.

Johan: And that’s not, of course, fully aligned with financial investors.

Remy: So–

Johan: So that’s the moment when you hire an investment banker to fully align it.

Remy: Yeah.

Johan: I think that’s one. And the second reason is, or course, to hire– to get the multiple biddings on the table, right?

Remy: And you wouldn’t want any shares, right? Because you wouldn’t want any shares in the company that you can’t have any say again.

Johan: Yeah, we were open but of course, we were looking, as a VC, for a return, right?

Remy: Yeah, exactly.

Johan And of course, short-term return would be indeed money.

Remy: Yeah.

Johan: But on the other hand, we were also open to, at the time, Vinted shares but that didn’t happen.

Sjuul: That’s too bad, right, Johan?

Johan: Yeah. I can buy Sjuul’s shares if you want.

Sjuul: No, not really. [00:50:00] Not for sale, man.

Johan: And the process– you mentioned Drake Star. You mentioned, indeed, you negotiating with the Vinted team. And then indeed, Stefan from our end to do in behalf of the financial– how did the process go, from your perspective?

Thijs: Yeah. Stefan Bary is this M&A legend. Just like a hustler diver, Stefan Bary is really the type that can get the company sold and knows everything about that market. And he already had like five years’ experience in it. So we, of course, learned a lot from him.

Sjuul: We were these young guys. We wanted to gain financial independence when we started it. If you would ask me at that moment, “Hey, fast-forward that, would you take this deal as it is in which we have you with how everything went?” I would say yes. But while you’re in such a process, you have so many moments of frustrations as well because things aren’t going as you want them. Your interest as a founder with your investors, even when you exited, aren’t necessarily aligned.

[00:51:00] One deal might have a bigger earn-out, for example, versus a different one where you get more ESOP with one party versus another, which is directly for founders. Investors don’t profit from that so they might prefer a different deal, whether it’s a bigger cash buyers upfront. So yeah, I think one of the eye-openers for me was that that is not always aligned, that at this moment, you need to stand up for yourself and really just guard your own interest, but nonetheless, I’m very happy with how everything went and the exit. I think we would never have had such exit if Peak Capital was not on board because we were just lacking that part of professionalism, in that part of running a business.

We were good at building products. Thijs was at hustling. Thijs also was great at building technology, still is, and yeah, I think we created something really cool and really valuable but we didn’t know the value of what we built. And we needed [00:52:00] somebody to actually say, “Okay. Well, look, this is what it’s worth. I know it doesn’t make sense because it might be the amount that’s going through your system on a yearly basis, or it’s a multiple in your revenue of let’s say 10,” which to me, I use my farmer’s knowledge, it doesn’t make any sense that you paid 10x revenue. So that’s where I really Peak Capital really helped. And that’s how we got this outcome at the end. And yeah, it was very valuable.

Remy: Now, founders who sell a company usually buy something for themselves to celebrate–

Sjuul: Yeah.

Remy: –in good exit. What did you buy?

Thijs: The first thing I bought was AirPods. Yeah.

Remy: Apple AirPods?

Thijs: Apple AirPods. This was my first present to myself. I really wanted it but I thought they were too expensive, and then I had some more budget and I bought the AirPods. I’m still using them, super happy with it. And then I bought a house that was really the thing in my life I really wanted to buy a house. I already made nine bids, and went to 30 houses in Utrecht. [00:53:00] And it’s a super terrible market.

Remy: It is.

Thijs: Yeah, then I bought a house. And I had at Fort Mondeo, which almost fell apart. So I bought a newer car. It’s a 10-year-old BMW but it’s a super improvement. It has air conditioning and Bluetooth. Those were the things that I wanted. And of course, you think, now, I have this, I can buy all these super sick things but eventually, they are not going to make you, anymore, happy. At least, if I look around me, I’m not seeing people get more happy about expensive cars or super sick houses.

Remy: I read some research on it. It tends to last for three weeks, the happy feeling. And then things will be back to normal.

Sjuul: Nah, we need a new dose these days.

Thijs: Even with a bit big budget, I still– yeah I have this hustler mentality of every euro I spend, I don’t want to do stupid things. I really want to [00:54:00] be in this position for the rest of my life and for the rest of my children’s life, and invest smartly, and do smart things, and not just be this guy who goes to a club and spend 3k. It’s like, no, this is like completely not my thing.

Remy: So I guess Johan will pay for drinks tonight.

Johan: But you probably did that once also, Thijs, knowing you a little bit.

Thijs: I took all my friends to France.

Johan: Okay, yeah.

Thijs: We went to a holiday house because I told my friends, “If I sell United Wardrobe, then I take you all to this holiday to Indonesia.” And we’re going– and then it was COVID. So we picked France. We had a sea cliff house there. We had an amazing time. Sjuul was there. It was just last week. Four days of partying and celebrating with my friends. Yeah, we had amazing food. We watched football. We swam in the pool and had a good time with people, and– yeah.

Remy: What did you buy, Sjuul?

Sjuul: Yeah, very stereotypical apparently. But I also bought a car.

Thijs: His first car.

Sjuul: My first car. I just–

Thijs: The Volkswagen Polo. [laughter]

Sjuul: Yeah.

Thijs: Yeah, I was there, and Sjuul too, with Thijs. I don’t know what I had to buy and I was like, “Okay, Sjuul, what’s your budget?” He said< “Okay, this is my budget.” “Ah, we’re going to buy a Volkswagen Polo. It’s a small car because you live in the city, you can park it. Volkswagen is a good one. And then we went to this outdoor shop in the build. And he was like, “Okay. Thijs, you drive it.” And I drove it and like, “How’s the stereo?” “It’s fine.” “Okay. We’re going to buy it. Okay, nice.” A bit of negotiation and we got, I think, a K off the price. We saved like a thousand euros and we had Sjuul a new car.

Sjuul: And also a house apparently.

Thijs: Yeah.

Sjuul: And I’m also taking some of my friends on a holiday in December going to the Caribbean to sail around until I got them around for two weeks.

Remy: Ah, cool.

Thijs: So. cool.

Sjuul: Yeah, those things, I think are the basic things that you want, if you have a little bit more budget. So a way to transport yourself really easily, a nice place to live, and good times with friends and family. So yeah.

[00:56:00]

Remy: Cool. Now because Johan was an investor in the company, we will derive from our format and I myself will do an estimation about the exit of United Wardrobe. So hold on tight.

Let’s set the stage. This is what we found online. United Wardrobe was founded in 2014, and a team of about 40 employees, and about 4 million active users on the platform at the date of acquisition. Interestingly enough, very recently in January of 2021, Depop a US competitor of United Wardrobe got acquired by Etsy, a global marketplace for handcrafted and vintage goods. Etsy is a listed company worth almost 25 billion dollars today. And the acquisition value of Depop is published to be 1.6 billion with 26 million active users in 150 countries.

Another interesting development in the same space is the IPO of the US-based Poshmark, a second-hand marketplace for fashion and accessories. The value of Poshmark today is estimated to be [00:57:00] 3.3 billion with 60 million monthly active users in the US, UK, Australia alone. With these numbers, we can calculate the value per active user, which can function as a benchmark. For Depop, this would be 1.6 billion valuation divided by 26 million active users, leading to 62 euro value proactive user. For Poshmark, on the other hand, it’s a 3.3 billion valuation divided by 60 million monthly active users, leading to 55 euros value per user.

We can only use these numbers with a discount. So we’re talking about a huge difference in scale, not only in the numbers of active users but also in a geographical reach. Besides, both of these businesses have their headquarters in the US. And as we all know, valuations in the US are a lot higher than in Europe. Therefore, we take a 50 percent discount on the average value per user leading to a valuation per active user of about 30 euros.

For [00:58:00] the sharp listener here, for Depop and Poshmark, we talk about monthly active users. For United Wardrobe, we only have the number of active accounts. As we don’t have numbers, let’s make the assumption here. One-third of the active users are monthly active. This would mean 1.3 monthly active users for United Wardrobe. Now, if we multiply the 1.3 million monthly active users with a 30 euro value per active user, we get to a valuation of roughly 40 million euros. Thijs, Sjuul, am I correct? Too high or too low–

Sjuul: Yeah, no comment.

Remy: –for this assumption?

Thijs: Yeah, we cannot say anything about valuation. Of course, I’m the type that likes to scream everything from the roofs.

[laughter]

Thijs: And I would love to do it but we just can’t. [laughs] No.

Sjuul: I agree with Thijs. No comment.

Remy: Johan?

Johan: Not it was negative.

Thijs: Of course, you can say, “Oh, Thijs, just tell it,” [00:59:00] but it’s just not strategical for Vinted. And we are together now, all in Vinted. And we want to be the biggest player selling fashion in the world. And we’re still so small and there are so many opportunities that having a risk of publishing these numbers is just like, yeah, it’s not worthwhile. And it’s just not strategical because there are so much competitors or so much going on in this market. And this data is just–

Remy: You’re so rational, who are we talking to?

Thijs: A lot of people had to stamp it into my mind but– yeah.

Sjuul: This was also part of the script.

Remy: Ladies and gentlemen, thank you so much for listening to this episode of The Big Exit Show. We hope you enjoyed today’s program. If you did, please subscribe to our show at Spotify or your favorite podcast platform. If you have feedback, please send a message to [email protected] My name is Remy Gieling.

Johan: And I’m Johan van Mil.

Remy: Thanks again for listening, and we hope you join us on the next episode.