Croissant came out of stealth mode in 2023 with $24 million in seed funding and a notion that, with the right incentives, it could gin up more secondhand shopping — to the benefit of both shoppers and stores. 

John Howard, cofounder and chief executive officer of the Nashville-based fintech company, said that premise held and the business landed on its feet. 

Now Croissant is looking to ramp up with a new twist that will prepay retailers for future sales as well as another $28 million in funding, including equity and debt. 

The business got its start in late 2021 while Howard was working at private equity giant KKR.

“I was looking at all of these tools that were proliferating,” the CEO said. “Buy now, pay later was booming and everything seemed to be focused on, How do we give consumers more debt to buy things more impulsively and pull forward their spending power? I went to [KKR cofounder] George Roberts with the idea of, ‘What if we actually focus on the asset side of the customer’s balance sheet and empower people to buy better things and think about their stuff as value-retaining assets?’”

So Croissant was launched with an approach that offered shoppers a guaranteed resale value when they bought now. 

Croissant is installed as an extension on the Chrome web browser and tells shoppers exactly what the future resale price will be of their new purchase — from 80 participating retailers and brands, including Mytheresa, Bloomingdale’s, Veronica Beard and Isabel Marant. 

It’s an approach that requires higher-end styles that have what Howard described as “retained value” — which is the kind of value he’s looking for anyway.

“Life is better lived when you’re buying better quality things,” he said. “And now I’m trying to show you that financially too. Buying better quality ends up paying off in the long run…that’s also what we try to support in the brands that we work with.” 

When a shopper using Croissant sees a pair of jeans for, say, $300, the platform will guarantee to buy that look in the future for 30 to 40 percent of the MSRP, or up to $120. 

If the jeans are sold to Croissant down the line, the company will give shoppers credit to use in its network, spurring more sales for the company’s partners. The secondhand goods are sold via platforms like Poshmark or through Croissant’s dedicated shop. 

The venture is backed by Portage as well as Roberts and another KKR cofounder, Henry Kravis. The initial group of investors has now put in more equity and the company has also raised debt. 

That new money is going toward firing up the company’s flywheel. 

While Howard said Croissant has found its “hardcore” users, the company discovered the initial set-up didn’t offer enough “instant gratification for the shopping audience.”

Now Croissant is going to use its new funds to share some of the affiliate money it gets from brands with shoppers. 

So people who use Croissant will get 10 percent back on purchases made within the network in credits that can be used immediately to purchase other goods.

“Our average order values in our carts are $700,” Howard said. “So this is pretty material. It’s 70 bucks every time you shop, just like you’re shopping normally. But now you’re using Croissant, you’re getting $70 dropped into your spendable balance.”

On the other side, Croissant is going to brands and offering to pay up front for purchases its users will make on the site, for a bigger cut of the action. 

“It’s not just that one customer spending a $1,000, but it’s a hundred of those people spending $100,000 over the next three months. We’ll pay you $80,000 over the time that they redeem that, but why don’t we give you $70,000 right now? You could go spend that on whatever you need on inventory buys, on marketing spend, whatever. It’s completely non-debt, nonrestricted capital that we’ll pay upfront.”

That gives Croissant a tidy retail ecosystem where it’s creating a currency for shoppers to use and an offer to buy their latest purchase while retailers get customer traffic and access to a larger upfront payment. 

Howard is looking to bring more people into that ecosystem with $7.5 million to $8 million committed to marketing spending for this year. 

That’s enough to acquire 1.5 million registered users and 130,000 active shoppers by the end of this year, the CEO said. 

“We’ll do at least $250 million of shopping GMV by the end of this year for our brand partners,” he said. “We should be profitable by the end of this year.”