American tennis icon Serena Williams' fund leads $3 million fashion app round

Serena Ventures, the venture capital firm run by American tennis icon Serena Williams, led a $3 million seed round in Trace, a presale shopping app that went live on Thursday, according to fashion trade publication WWD.

Shakti VC also took part in the round, WWD reported. Williams, the 23-time Grand Slam singles champion who serves as managing partner of Serena Ventures, said the firm invested because of the size of the market, the company's approach and its founders.

"Trace is transforming the way people shop," Williams told WWD. She said founders Katie Pfleger and Ella Rubin "have the experience and grit to make this vision a reality."

How the app works

Trace reverses the usual order of resale. A shopper who is thinking about buying a new item pastes a product link into the app, and artificial intelligence pulls in the details to create a listing in under 10 seconds. Other users can then "call" the item, offering to rent or buy it from the lister at a set price and date. The caller is charged once the lister accepts, and the original shopper still buys the piece new from the retailer.

"Traditional rental and resale marketplaces largely start with items people already own, then find demand," Pfleger and Rubin said, according to WWD. "Trace reverses that sequence. You can find the person who wants it next before deciding to buy it first."

The founders argue that demand for fashion peaks when a piece is new, in season or suddenly everywhere because a creator wore it, and that the moment has often passed by the time the item reaches a resale site.

Both founders are Harvard Business School graduates. Pfleger previously worked at Etsy, the online marketplace, while Rubin helped launch Walmart's online grocery business.

During a beta test, fewer than 300 users listed more than 500 items, and 32% of users listed an item when they signed up, according to WWD. Seven in 10 calls placed during the test were for rentals, with the rest for purchases.

The company charges buyers a 10% service fee plus a $3 protection fee on purchase calls, and listers pay no commission when an item is resold. Rental calls carry a 10% service fee and a protection fee of $5 to $12 depending on the item's value, and listers pay a 15% commission. Trace is marking the launch with a weekend pop-up at Shopify's store in New York's SoHo neighborhood.

Serena Ventures came across the startup during its fundraising after the founders pitched Trace during a visit to Harvard Business School by social media personality Alix Earle, who featured it in a TikTok video that went viral, WWD reported.

An investor and a watch designer

Williams set up Serena Ventures before retiring from professional tennis in 2022 and has built it into one of the better-known venture firms run by a former athlete. The firm closed a $111 million inaugural fund in 2022 and has backed companies including MasterClass, Tonal and Impossible Foods. It has also backed Esusu, a U.S. rent-reporting fintech company now valued at $1.2 billion.

The Trace investment comes weeks after Williams added watch designer to her business résumé. In September, Swiss watchmaker Audemars Piguet released the Royal Oak Selfwinding Chronograph "Serena Williams," the first timepiece she has co-designed with the brand, according to Essence. Williams has worked with Audemars Piguet for more than a decade.

The 38-millimeter watch has a white ceramic case and bracelet, a pink-tinted mother-of-pearl dial and a 22-carat pink gold rotor visible through a sapphire caseback. It runs on Calibre 6401, a new self-winding chronograph movement. The watch sells for $95,900 and is limited to 500 pieces, Gear Patrol reported.

"I've always believed that strength and feminine energy can exist side by side," Williams said at the launch.