The news: Two recommerce fintechs based in the British Isles impressed investors with pitches that promoted their circularity and sustainability. Both started off in fashion—and couldn’t have picked a better time to launch: Fast fashion is out; sustainable fashion is in.
What do they do? The recommerce movement encourages consumers to buy used items and shop more sustainably to prevent items from entering landfills.
But these recommerce fintechs aren’t just recycling or upcycling—as TechCrunch puts it, they’re also “reimagining the function of a bank as an arbiter and exchange of resale value.”
Twig’s app lets users sell and trade digital and physical items—like clothing or electronics—on its platform.
And Responsible developed an embedded finance platform, Buy Back, that can be integrated into a fashion brand’s ecommerce site or physical stores.
Here’s how they work: The fintechs employ blockchain and embedded finance to appeal to Gen Zers and younger millennials, who have shown a keen interest in both the thrift and sustainability of secondhand marketplaces.
Like the digital pawnbroker Diem, the Twig app comes with an emoney account—Twig’s is provided by PayrNet—and a Visa debit card.
Responsible’s BuyBack plugin, on the other hand, is embedded within an ecommerce site as an API or at a store through scanning.
Why they could succeed: Both fintechs aim to meet consumer demand for participating in the circular economy. Sixty-two percent of global consumers believe it’s very important that the companies they buy from adopt circular practices—highlighting the demand for environmentally minded solutions. The challenge is that reselling unwanted items can be more time-consuming than throwing them away.
Why it’s worth watching: Twig and Responsible help users more seamlessly resell their items for instant cash—particularly luxury items that tend to retain more value over time. But the two fintechs are also expanding the definition of wealth beyond real estate and cars to include other items that consumers can convert into alternative stores of value.