What’s the Latest E-commerce IPO All About?

Nearly two months ago, the self-proclaimed “social marketplace” Poshmark (POSH) joined the list of emerging e-commerce powerhouses like Etsy (ETSY), eBay (EBAY) and Pinterest (PINS).

After pricing its IPO at $42 each, shares of Poshmark reached as high as $101.50 on the company’s first day of public trading. Shares have since fallen off considerably as tech stocks, in general, are dealing with a big cooling-off period in recent weeks, but make no mistake there’s definitely a niche for companies like Poshmark in today’s market.

And this week, another there’s another promising company looking to capitalize on that niche as well. The Calif.-based online resale company ThredUp Inc. (TDUP) has filed its initial public offering prospectus with the SEC after first filing to go public confidentially back in January.

ThredUp specializes in secondhand clothing and accessories for women and kids, and since its inception in 2009, the company says it has 1.24 million active buyers as of Dec. 31, 2020, up 24% year-over-year, along with 428,000 active sellers. The company had revenue of $186.02 million in 2020, up from $163.81 million the year before. But the company recorded a net loss of $47.8 million in 2020, wider than the $38.2 million loss posted in 2019.

James Reinhart, who is now chief executive, wrote Reinhart in his letter, included in the ThredUp prospectus, saying:

“In my view, not since the advent of off-price stores has a new model so structurally disruptive come to pass in retail.”

“Because the market for secondhand items is evolving, particularly the online resale of secondhand items, it is difficult for us to predict our future results of operations or the limits of our market opportunity. We expect our operating expenses to significantly increase as we expand our operations and infrastructure, make significant investments in our marketing initiatives, develop and introduce new technologies and automation and hire additional personnel.”

Much like Poshmark, ThredUp is riding a wave of accelerated digital shopping during COVID-19 and is also part of the thriving secondhand sector, which is experiencing a surge as customers look for eco-friendly and budget-conscious options for filling their closets.

Originally published by MarketWatch.com

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