Kering has acquired an about 5 percent stake in Vestiaire Collective, an online platform for second-hand fashion items. The investment gives the French luxury goods group the right to be represented on e-tailer’s board.

Kering and the American investment firm Tiger Global Management backed a €178 million financing round for the company. Existing shareholders in Vestiaire Collective, including its CEO, Max Bittner, have also reinvested in the company.

In a statement, Kering said that the financing gives Vestiaire Collective “unicorn status”, indicating that it is worth more than $1 billion. It added that the platform’s transaction volume more than doubled last year.

Kering pointed out that the pre-owned fashion sector has experienced rapid growth over the last three years with a further acceleration during the Covid-19 pandemic. The increase has been predominantly driven by younger consumers’ increased focus on sustainability and a growing trend for social shopping and online communities. The amount of second-hand pieces in people’s closets is predicted to grow from 21 percent in 2021 to 27 percent in 2023 with the value of the second-hand sector forecast to be worth over $60 billion by 2025, Kering added.

François-Henri Pinault, chairman and CEO of Kering, said that “pre-owned luxury is now a real and deeply rooted trend, especially among younger customers. Rather than ignoring it, our wish is to seize this opportunity to enhance the value we offer our customers and influence the future of our industry towards more innovative and more sustainable practices.”

Meanwhile, Tiger Global Management is expected to support Vestiaire Collective’s expansion in the U.S.

Vestiaire Collective was created in 2009 and initially focused on Europe. Tiger Global’s partner Griffin Schroeder expects the platform to seize the “momentum of already spectacular growth in the United States and Asia Pacific. As of January 2021, local sellers in those regions had increased their items sold by more than 250 percent year-over-year.”