All research on startup and the whole investment memo has been done for personal use of Akim Arhipov.
Yaga is a peer-to-peer online marketplace for secondhand fashion in Africa. Founded in Estonia, the company expanded to South Africa and recently launched in Kenya. Yaga's mission is to make fashion consumption more sustainable by providing a safe and easy platform for buying and selling pre-owned clothing.
The platform operates on an escrow model, ensuring secure transactions by holding funds until the buyer receives the item. Yaga boasts a 41m€ GMV annual run-rate and has raised 3.3m€ to date. With a focus on localization, including local language, payment, and delivery options, Yaga is poised to capture the growing African secondhand market, estimated at over €1 billion in potential GMV.
Recent Key Milestones:
- Reached profitability in May 2024
- By November 2024, a total of 4 million items have been sold through Yaga, resulting in CO₂ savings equivalent to driving 68 million kilometers—the same as circling the Earth 1690 times
- Yaga was chosen as Estonian CleanTech of Year 2024, listed among Europe's fastest-growing startups by Sifted (Top 30 & Top 250) and rated Top 1 e-commerce and startup in Estonia by F6s
fff.club was approached with an offer to buy Yaga shares in a secondary transaction. The secondary deal is being made due to minor liquidity needs from the founders and C-lvl management.
The apparel industry is one of the most polluting sectors on the planet, but Yaga is committed to changing that. By making it safe and effortless to choose secondhand over new, Yaga helps reduce waste and environmental impact. Beyond sustainability, the platform also empowers communities—allowing people to turn unused items into extra income while giving others access to quality fashion at a fraction of the price.
- Yaga’s purpose: Sustainability
- Mission: Yaga is the #1 choice for selling and buying secondhand fashion in Africa and beyond
Yaga offers a platform where everyone can be a seller or a buyer, while removing the inconvenience and worries related to peer to peer transacting. The platform's escrow model protects buyers and sellers by holding payments securely until the buyer confirms receipt of the item and being happy with it.
Monetisation:
- Fee revenue: Yaga earns a fixed+variable fee on every successful order. Estonia fee for example is 5% + 0.69€.
- Delivery mediation profit: Yaga provides shipping at retail prices while securing discounted rates from integrated service providers. Due to its large parcel volumes, Yaga is able to negotiate significant discounts, resulting in a substantial mediation profit.
- Alternative options: Yaga has mapped a list of monetisation options but has’t yet focused on it
Competitive advantages
- First-mover advantage in Africa: Yaga has established itself as a leading player in the African secondhand fashion market, giving it a significant head start over competitors. This advantage allows Yaga to build brand recognition, capture market share, and establish strong relationships with local users and partners. Closing in on a million users in Africa.
- Localization: Yaga is committed to adapting its platform to the specific needs of each market it serves. This includes offering local language options, integrating local payment methods, and providing localized delivery solutions. This focus on localization makes Yaga more accessible and appealing to users in different regions, giving it an edge over global competitors with a one-size-fits-all approach.
- AI-powered security: Yaga’s escrow model ensures a secure and reliable transaction process, while AI-driven tools continuously monitor platform activity to detect unauthorized behavior. Depending on the severity of the violation, actions range from user notifications to automated shadow bans, rendering the offender’s actions invisible to others. This proactive approach keeps bad actors engaged without disrupting the community, ensuring a safer experience for all users.
- Zero fees for Sellers: Peer-to-peer marketplaces thrive on supply, making it crucial to eliminate barriers for sellers. By removing all fees, sellers keep 100% of their earnings, encouraging more listings, increasing product variety, and driving a vibrant, competitive marketplace.
Market Size and dynamics
The global secondhand apparel market is growing 3x faster than rest of global apparel market and is projected to reach €319B by 2027, growing at a CAGR of 14.3%. This growth is driven by increasing consumer preference for sustainable and affordable fashion, especially among younger generations. Yaga operates in the African secondhand fashion market, which already offers over €1 billion GMV potential for Yaga.
The company has achieved a 41m€ GMV annual run-rate with a 100% YoY growth rate and is planning to expand to three additional markets in the next two years. We are aiming to plant a lot of seeds as it takes time for the markets to grow into significant volume contributors.
Key growth drivers
Market challenges
- Increasing consumer awareness of sustainability: Consumers are becoming more aware of the environmental and social impact of fast fashion and are increasingly seeking sustainable alternatives.
- Monetary benefits: Secondhand fashion offers both the opportunity to earn cash by selling unused clothing and purchase quality items at a more affordable price.
- Rising popularity of secondhand fashion: Trends such as vintage and retro styles, coupled with a desire for unique and affordable clothing, are making secondhand fashion more mainstream and desirable.
- Growing E-commerce penetration: Africa: The expanding access to the internet, smartphones, and preference of online payment methods is accelerating the growth of e-commerce, including secondhand fashion platforms like Yaga, in Africa.
- Improved accessibility and logistics: The rise of e-commerce has also led to the growth of more affordable, faster, and reliable courier services, enhancing the accessibility of secondhand fashion for consumers across the continent.
- Market education: Yaga is introducing a partially new way to transact online within the community. It makes market penetration more time-consuming but allows Yaga to solidify its position in the market.
- Competition: The growth of the online secondhand fashion market is creating competition. Yaga has been talking with more established players and learned that they plan to focus on growth opportunities in their own regions. While Africa is currently seen as a distant and different market, this perception may shift in the future. Yaga, already equipped with valuable market insights, is expanding quickly across the continent, positioning itself to leverage a first-mover advantage.
- Fraudulence: People are creative in finding new ways of taking advantage of people and the problem is higher in regions with higher unemployment. Yaga addresses this by taking active stance towards eradicating all such opportunities.
Competitive landscape
Risks
- Vinted - A leading international online C2C marketplace specializing in secondhand fashion. Known for its user-friendly interface, large selection of items, and focus on affordability. It's particularly strong in Europe. Emphasis is on buyer protection.
- Depop - A social-selling platform with a younger audience which focuses on power sellers. It blends elements of social media with e-commerce, allowing users to create personalized profiles and interact with each other. Strong emphasis on visual presentation and community.
- Vestiaire Collective - A platform specializing in pre-owned luxury fashion. It focuses on high-end brands and offers authentication services to ensure the legitimacy of items. Caters to a more discerning clientele.
- GoTrendier - A platform primarily focused on the Latin American market, connecting buyers and sellers of pre-owned fashion. It aims to make fashion more accessible and sustainable in the region.
- Economic downturn: Economic instability could impact consumer spending on non-essential items like fashion, yet this rather opens up more opportunities for Yaga as people switch to more affordable alternatives as secondhand. The motivation behind it just shifts from sustainability to affordability.
- Technological disruptions: New technologies or platforms could emerge, disrupting the existing market dynamics.
- Operational challenges: Scaling operations and maintaining customer satisfaction are crucial for Yaga's continued success.
Aune Aunapuu - Co-Founder and CEO
Karl Erik Kotkas - Co-Founder and CFO
Sofie Malá - VP of Growth
Boris Mihov - VP of Product
Kristjan Vilosius - Co-Founder, early investor & strategic advisor
Rait Ojasaar - Co-Founder through an engineering partner, early investor
Yaga is led by a mission-driven team with extensive experience in business management, finance, growth strategy, and product development. The team is supported by a strong advisory board with expertise in financial management, strategic planning, and investor relations.
Performance Highlights
GMV: 29m€ in 2024, +66% YoY;
GMV annual run-rate: 41m€ as of Nov 2024, +100% YoY;
Net revenue margin: 8%, includes net fee revenue and shipping mediation profit;
Runway: 0.7m€ in the bank and growing;
Monthly visitors: 770k;
Monthly new listings added: 700k;
Monthly transactional volume: 180k;
Funding
Investment raised: 3.3m€;
Latest round valuation: 13.3m€ post-money valuation in 2022, based on 1X annual GMV run-rate multiplier
Current CAP table: 74% team & 26% investors
GMV projections:
2025 - 49m€, reaching 68m€ run-rate;
2026 - 89m€, reaching 101m€ run-rate;
Major Investors: Trind VC, Startup Wise Guys, Specialist VC, Rubylight VC and various known Estonian founders;
Last secondary deal: -
Transaction: secondary through buying out a micro shares of founders;
Allocation: limited to $500k;
Valuation: 32m (Valuation logic is yearly GMV Run Rate - 20%)
Minimum ticket: 10 000€ (first come first served)
Fees for fff.club members: 7% one time fee + 7% carried interest (from profit)
