Poshmark is pushing into the public market at a high-end valuation as the resale market sizzles – TechCrunch

Poshmark, A nine-year-old Redwood City Ca.-based online marketplace for second-hand clothing, beauty, and home decor products, is set to start trading on Nasdaq as a public company tonight, after 6.6 million. More than originally planned share price, According to Bloomberg.

According to its report, the company, which previously expected to sell shares for between $ 35 to $ 39 million, saw enough demand to rationalize the price to $ 42 per share – one that the company held on a fully diluted basis. Value of $ 3.5 billion.

Given the enthusiasm of investors of all types of new public consumer brands, including AirBnB, DoorDash, and to a more moderate degree, Wish (where it is currently open when it hits the market in mid-December) for the company as it moves from private Makes a move for a publicly traded company.

There are many things going for it.

According to the company, more than 70 million Poshmark users are selling more than 130 million items through the platform. And its revenue is growing in the right direction. Poshmark makes money from peer-to-peer sales and commissions on the products it sells through wholesale, and it became profitable for the first time last year. According to its S-1, it generated net income of $ 21 million from revenue of $ 193 million during the nine months ended September 30, 2020, compared to $ 34 million on revenue of $ 150 million during the same period in 2019. There was a net loss of

Also, unlike many brick-and-mortar retail businesses that were particularly hard hit by epidemic-related shutdowns – Jay Crew, Neiman Marcus, and Brooks Bros., just a few in a row to declare bankruptcy. Are – Pendmark only facilitates transactions between buyer and seller, so there is no burden or expense of holding inventory.

Last but not the least, resale platforms of all the strips have air on their backs. Resale can be more economical. It can be a tool for sellers to make money. Those endorsing a fast fashion brand say shoppers are more interested in sustainability than ever before, and that no one else ever buys or uses light-weight goods that are environmentally friendly. (Forever 21, fast-fashion mall Staples, filed for bankruptcy in 2019.)

To overcome the poshmark involves improving the customer experience, if different types of review sites are to be believed. The company consistently receives poor marks for its quality control and support service.

Although profitable, it is not yet very profitable, which may need to be changed, and quickly.

Poshmark, raised $ 153 million From its venture investors, public market investors are also challenged to understand how it differs from already publicly traded rivals on eBay and the like The RealReal, Which went public in 2019 and has a current market cap of about $ 2.3 billion. It would also need to differentiate itself from other companies hot on its heels.

In fact, one of his closest rivals, Threadup, Entered a confidential registration statement with the SEC for an IPO, which was done by Poshmark at the same time.