Yaga €4M Raise

Estonian second-hand fashion marketplace Yaga has raised €4 million in new funding to accelerate its expansion across emerging markets, including Africa and the Middle East. The investment round, announced this week, was led by Specialist VC and joined by H&M Group, Trind Ventures, Startup Wise Guys and several angel investors.
(en.ain.ua)

The fresh capital marks a major milestone for the company, founded in 2019 by Aune Aunapuu, as it seeks to bring affordable, sustainable fashion to millions of consumers worldwide. The funding will be used to scale Yaga’s operations in existing markets such as South Africa and Estonia, as well as to expand into new territories in the Middle East and North Africa.

A Marketplace for the Circular Economy

Yaga operates an online resale platform where users can buy and sell second-hand clothing and accessories in a secure, community-driven environment. The platform’s mission is to make sustainable fashion accessible, affordable, and profitable for everyday consumers.

The company’s business model taps into two growing global trends: the rise of the circular economy and the growing appetite for affordable fashion in emerging markets. With second-hand clothing expected to account for 20% of the global fashion industry by 2030, platforms like Yaga are increasingly seen as the future of responsible retail.

Founder and CEO Aune Aunapuu said that the company’s expansion is driven by a simple idea: “Sustainability should not be a luxury. We want to make pre-loved fashion a mainstream choice for millions of people.”

Rapid Growth in Africa

Yaga has seen particularly strong growth in South Africa, which has become one of its largest and most active markets. The platform now serves over one million users globally and records more than 100,000 monthly transactions. In South Africa alone, Yaga’s user base has grown tenfold in the past two years, driven by rising demand for affordable fashion options and growing environmental awareness among younger consumers.

The success in South Africa has provided a template for Yaga’s expansion into other regions with similar consumer dynamics. The company is now eyeing markets like Kenya, Nigeria, and several Gulf states, where second-hand fashion remains an untapped opportunity.

According to Aunapuu, emerging markets offer the right combination of digital readiness, fashion-conscious consumers, and unmet demand for affordable quality clothing. “People everywhere love fashion — but in many regions, new retail prices are simply out of reach for average consumers,” she said. “We give them a way to shop smarter and more sustainably.”

Investor Confidence and Strategic Partnerships

The funding round attracted attention from global investors keen to back sustainable business models. Specialist VC, which led the round, has previously supported fast-growing Baltic startups in fintech and e-commerce.

Trind Ventures and Startup Wise Guys also joined the round, along with H&M Group — one of the world’s leading fashion retailers. H&M’s involvement is particularly notable, reflecting its broader interest in circular economy initiatives and resale platforms.

In a statement, H&M’s New Growth & Ventures managing director said Yaga’s model aligns with the company’s vision for a more sustainable fashion ecosystem. “Yaga’s focus on emerging markets and its commitment to affordability perfectly complement our own sustainability goals,” the statement read.

The partnership may also open future collaboration opportunities between Yaga and H&M, including supply chain integration, co-branding, or logistics partnerships in developing markets.

Expanding the Platform

With the new funding, Yaga plans to invest in product development, logistics optimization, and platform technology. The company is working on improving its mobile experience and integrating AI-based tools to enhance listing quality, pricing recommendations, and buyer-seller matching.

Yaga’s escrow-based payment system ensures secure transactions by holding funds until the buyer confirms delivery, helping to build trust in regions where online resale remains new to many consumers.

The platform also offers integrated shipping options through local partners, allowing sellers to print labels and dispatch packages easily. These innovations have helped Yaga establish credibility and convenience, two major hurdles for peer-to-peer resale platforms in developing markets.

Sustainability as Core Strategy

Beyond profitability, Yaga’s mission is deeply rooted in environmental sustainability. The fashion industry is one of the world’s largest polluters, contributing an estimated 10% of global carbon emissions. By encouraging reuse and extending the life of garments, Yaga positions itself as part of the solution.

The company reports that over 5 million items have been resold through its platform, preventing an estimated 2,000 tons of textile waste from reaching landfills. In addition, the company promotes awareness campaigns about mindful consumption and collaborates with influencers to destigmatize buying second-hand clothing.

As consumers increasingly view sustainability as part of lifestyle identity, Yaga believes that conscious consumption will become the new standard.

Competing in the Global Resale Market

While competitors such as Vinted, Depop, and ThredUp dominate Western markets, Yaga differentiates itself by targeting regions often overlooked by larger players. The company’s localized strategy and affordability-first approach have proven successful in attracting users who may be entering e-commerce for the first time.

Yaga’s growth model also focuses on high community engagement. The platform includes social features that allow users to follow sellers, rate transactions, and interact around listings. This fosters trust and repeat activity, making Yaga more than just a resale site — it’s a digital community for sustainable fashion enthusiasts.

Challenges Ahead

Despite its success, Yaga faces the same challenges as other resale platforms: balancing scalability with moderation, ensuring quality control, and maintaining user trust. Logistics can also be complex in emerging markets, where postal systems vary in efficiency.

The company is addressing these issues by forming partnerships with local delivery providers and exploring last-mile innovations, including pickup points and drop-off lockers. Additionally, Yaga plans to invest in AI-driven moderation to detect fraudulent listings and counterfeit items before they reach buyers.

Another challenge lies in education. Many potential users in new markets are unfamiliar with resale culture, so Yaga must invest in marketing and community engagement to normalize second-hand shopping as a fashionable, responsible choice.

The Road Ahead

With this new investment, Yaga aims to become a global player in second-hand fashion while maintaining its focus on emerging economies. The company plans to double its headcount, expand operations into at least five new countries by 2026, and strengthen its partnerships with sustainability-focused investors.

According to Aunapuu, Yaga’s long-term vision is to empower millions of people to view fashion as circular, not disposable. “We believe sustainability and growth can coexist,” she said. “Our mission is to make resale accessible to everyone, everywhere.”

As global interest in sustainable consumption continues to rise, Yaga’s expansion could reshape the fashion resale market beyond Europe — positioning emerging markets as the next frontier for circular fashion innovation.