Aisling Byrne pictured, the Founder & CEO of Nuw.
Every month we feature some of our Everything Marketplaces community members to help highlight their story, their journey building their marketplace, and get a glimpse at what's ahead.
In this member feature we highlight Aisling Byrne, who’s the Founder & CEO of Nuw. Nuw is a marketplace that's reinventing the way fashion & clothes are being exchanged. They’ve recently seen a surge in demand and are quickly scaling as an early stage marketplace.
I was studying music at University in 2013, so I never imagined myself as an entrepreneur. I took a trip to India though, which was at the same time that Rana Plaza (a Bangladesh garment factory) collapsed. Seeing the impact that this had on the local economy and how broken the fast-fashion industry was really opened my eyes to how much we waste (roughly 150 billion) in clothes each year as consumers.
After this trip, I tried to resell some of my clothes, but everything I owned was high-street fashion, so the thrifters on the major resale platforms were only looking for the select value items that they could buy at a discount and resell for profit. This seemed different to how it should actually happens in real life with consumers and friends. They also didn't take clothes from Zara or H&M since they were lower price points, which are usually traded more.
The key insight that eventually came from this experience is that perceived value is the biggest barrier to recirculating mass-market fashion. If you try to resell clothing for too low, it’s not appealing. On the other hand, if you try to resell for too high of a price point, consumers tend to think that it’s not worth it. This led to me realizing that there needed to be a new (and better) way to value clothes. With this in mind, we created Nuw, which is the marketplace where clothes are your currency. With Nuw, you can trade the clothes you don’t want for ones that you do. Also, a spoiler alert is that when you take item price away, everyone wants the high-street brands and the "sell-through rate" ends up goes from 10% to 83%.
There were two things I didn’t have when starting Nuw, which were 1.) technical or development skills, and 2.) funding to hire developers. Without these, I was forced to get creative in proving the concept of Nuw in the most low-tech way that I could. I taught myself how to build an initial version of the "platform" using Squarespace, Whatsapp, and Excel. I then went to Universities and visited random lectures that I could attend to ask women if they could send me photos of clothing other students might want. I’d then put them in Whatsapp groups to try and organize clothing swaps or exchanges. This worked like a charm and allowed me to prove out the initial concept for Nuw.
The biggest challenges once we started our actual marketplace was in building both supply and demand. Many refer to this as the cold start problem and the approach that we took to solve for it was creating a reward model where users were required to upload an item to earn a coin. Users can then spend their coin(s) to exchange or swap a piece of clothing from another user. Once the foundation of our supply was seeded, this reward model with the coin helped build a "one-in-one-out" model where our supply essentially never depletes with an increase in demand, so this flywheel allows us to focus on user growth.
Nuw is a platform that's harnessing the pent-up demand for recapturing value in clothing and wardrobe for the everyday consumer. 90% of the items on mass-market resale platforms are never sold. That’s not only frustrating the sellers, but also more recently with the origin brands. The brands need to compete in the second-hand market now more then ever. This is particularly difficult for the mass-market fashion brands (compared to luxury brands), because they loose all future value once an item leaves a retailer. It’s also not economically viable for them to start their own resale platform and compete with their retailers.
This is where the marketplace model and clothes as a new form of currency proves to be a great way to solve the big problem. It also creates a frictionless and gamified consumer experience, which leverages technology to more easily scale as a business. One other thing worth mentioning is that the simple fixed transaction fee per swap or exchange means that our unit economics are not incentivized by the average price of clothing and thus having to focus on increasing average item and sale costs like the other platforms do. That makes Nuw the most affordable (and conscious) option for consumers to spend their previously loved clothes as currency on Nuw, rather than money.
The key insight of knowing that only 10% of clothing that goes to thrift stores and resale platform is actually sold was one of the advantages we had when starting Nuw. We also knew that this was in large part being ignored and overlooked by the fashion industry.
Our approach was then sort of first principles and to identify the biggest barrier as to why this clothing was not getting a second life, which turned out to be how how it was being valued. To go back to the point about using clothing as currency, we took a big step in reinventing the way clothing is actually being bought and sold on marketplaces by introducing our coin model that rewards our community a coin for clothing items they list, which they can then redeem the coin(s) for others on our marketplace. While we're still early stage, this has proven to give us a clear advantage when it comes to unit economics, the flywheel we've created, and ultimately our ability to build up a marketplace from scratch that can help reshape the way clothing is being exchanged.
Another thing worth mentioning in regards to competitors is that the gamified experience using Nuw results in a much higher frequency of use and turn over of supply (83% of items are requested, with 50% in the first 24 hours) compared to other resale platforms. Since the speed of fashion is also rapidly changing today, we think that this model we use with Nuw unlocks big advantages that will prove to pay off.
I was a first-time and solo female founder, but I managed to raise our pre-seed round after moving to London and before a team was even in place. I won’t lie, this was very tough and challenging when I started the fundraising process. It took endless cold outreach, a bit of luck, and persistence, but I eventually built relationships that led to our early investment.
I'd also say that he most transformative support I had was from a fellow female founder throughout the journey. She spent time with me working on my deck, pitch, and went out of her way to introduce me to all of the amazing female investors she knew. After this, the ball was rolling and we closed our pre-seed round with some truly amazing investors.
After we closed this pre-seed round, we immediately set out to build our team, launched our initial marketplace, and (after the hiccup of a pandemic) proved our new business model that allowed us to gain traction through gamifying mass-market fashion, while also giving clothing a new home. In 2021 we then launched in multiple markets across the UK, Ireland, and recirculated over 20,000+ items of clothing.
I'd say that once your north star metric is in place and that's your focus as a marketplace, the world can continue to spin around you.
To expand on this, the pandemic has been incredibly challenging for us all. Nuw has been no exception and the north star that we defined early on has been the number of clothes that get a new lease of life on our platform. We had initially started out as a "borrowing" platform, but during the onset of the pandemic there were no events, which we were reliant on. Even if there aren't events, there are still billions of clothes sitting in closets, so we quickly pivoted into a more permanent exchange platform and marketplace.
Looking back, our first iteration for Nuw didn’t work. This was not only due to the pandemic, but because the platform was a "borrow" model involving returns. This works for designer clothes, so it naturally seemed like it could apply to our market, but we quickly learned that it couldn't. This time of total uncertainty and learning forced us to reimagine what Nuw could be. This process was not easy, but with the right north star metric and mission, the change can be more welcoming with the assurance of where you're going.
I ask myself "How does Nuw reach $1 billion in revenue"? To do so, we'll need to recirculate 750 million items of clothing. With 64 billion clothing items going to landfill each yeah (33% within 12 months) this seems like it might actually be a small goal compared to the massive opportunity and impact that we can make.
I see two ways that we achieve this scale, with 1.) product-led growth and increased network effects, and 2.) retailer integrations. The first is something we're deeply focused on right now. The second is something that's on our roadmap and we've started offering brand integrations where users can pull in past-purchases from brands on to the Nuw app and brands can receive a share of the revenue from each exchange. Using this two-pronged approach, we hope that Nuw not only starts a grass roots movement for change, but also creates a systematic change within the mass-market fashion and clothing industry at the same time.
We're currently in the process of raising our seed round (over half way there!), which is very exciting. Over the next 18 months, we'll also be launching in the US and key European markets. Oh, and we're also getting our initial retail integration partnership pilots live. Stay tuned for more!
Connect with Aisling in the Everything Marketplaces community.