Yaga raises €4M in sustainable fashion funding
Tallinn-based Yaga secures €4M in sustainable fashion funding led by Specialist VC and H&M Group to expand its second-hand marketplace across emerging markets.
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Founded 2017 · Tallinn, Estonia
Most fashion resale platforms chase European wallets. Tallinn-based Yaga just raised €4 million in pre-Series A sustainable fashion funding from Specialist VC and H&M Group to prove emerging markets actually want to buy second-hand. The Estonian startup has reached a €50 million GMV run rate focusing on South Africa, Kenya, and expansion into the Middle East.
Founded in 2017 by Aune Aunapuu, Yaga operates where Vinted and Depop don’t. The platform attracts 12 million monthly visits with an escrow payment system protecting both buyers and sellers. Items sell at 50-80% below retail, making fashion accessible in markets where price matters more than brand cachet.
Why sustainable fashion funding flows to emerging markets
The second-hand fashion market grew 15% globally in 2024 to $227 billion. However, Africa’s resale market has grown four times faster than anywhere else. Yaga’s South African sales increased sevenfold over 18 months while worldwide sales tripled.
H&M Group’s participation signals mainstream retail recognising that circular fashion isn’t a Western luxury anymore. “We strongly believe in the team behind Yaga, which has clearly shown capabilities to scale its marketplace for preloved fashion,” said Nanna Andersen, Managing Director of H&M Group’s New Growth & Ventures. The company sees Yaga’s African presence as complementary to its existing second-hand initiatives in developed markets.
Sellers have earned over €80 million on the platform to date. More than 6 million items found new owners, preventing textile waste in regions where fashion’s environmental cost hits hardest. The platform’s localised logistics and payment options address infrastructure challenges that keep global marketplaces from scaling in these markets.
From South Africa to Middle East expansion
Yaga achieved profitability with just 25 people and €3.2 million raised before this round. The company doubled annually while competitors burned through multiples more capital chasing lower-margin developed markets.
The fresh capital targets Middle East and North African expansion. These regions combine disposable income growth with existing second-hand fashion cultures but lack digital infrastructure for secure peer-to-peer transactions. Additionally, Yaga recently launched in Kenya after dominating South Africa, where it became the leading online fashion resale platform.
“Our growth in South Africa proves that this is a global movement, not limited to Europe or the US,” said Aunapuu. “With this funding, we will explore new expansion opportunities as we continue to build the sustainable fashion marketplace of the future.”
Resale platforms are shifting from niche to mainstream shopping destinations. Yaga’s emerging market focus positions it ahead of competitors still fighting over saturated European markets. The company proved sustainable fashion works everywhere, not just in wealthy zip codes.
