An order from ThredUp. Courtesy.
The resale platform, which specialises in automating the selling process for consumers hoping to clean out their closets, opened trading Friday, March 26 at $14 per share. As of 1:15 p.m. Eastern Time, its shares exceeded $18.
ThredUp’s IPO follows that of Poshmark, another resale company hoping to expand its market share in an increasingly populated field of resellers. Europe’s Depop, Vestiaire Collective and Vinted are all planning to expand in the US this year and beyond.
ThredUp’s competitive advantage is its seamless service for sellers, according to chief executive James Reinhart.
“Our managed marketplace model ultimately creates more value for buyers and sellers over time because selling your clothes one [item] at a time takes a lot of work and creates friction,” Reinhart told BoF. With ThredUp instead, sellers can send the company dozens of items at a time and it will take care of the rest of the process.
But convenience for users comes at a cost for ThredUp, which reported a net loss of $48 million in 2020, according to an SEC filing. Few resellers are profitable at this stage, but investors will surely be paying attention to the bottom line as the resale market grows.
ThredUp plans to use its IPO dollars to invest in automation technology in its warehouses and other pieces of infrastructure, Reinhart said.