ThredUp Prices IPO, Starts With $1.3 Valuation
ThredUp is ready for its big moment — and is starting with a valuation of $1.3 billion.
The secondhand specialist priced its initial public offering at $14 a share late Thursday, coming in at the high-end of its expected range of $12 to $14 a share. That means the company raised about $168 million as it sold 12 million shares to big investors.
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But the main event will be on Friday, when those institutional investors turn around and sell those shares on the open market, completing the IPO process on the Nasdaq stock exchange.
The offering will give the company a new kind of currency — a readily tradable stock — that it can use to pay executives, cut deals and gauge its financial position on a second-by-second basis.
Big first-day run-ups in values are common, especially in a buzzy sector like the secondhand market, but they don’t always last as investors reset.
Second-hand consumer-to-consumer platform Poshmark saw its valuation shoot up to $7.4 billion at the end of its first day on the market in January, but has since seen its market capitalization slip to $2.9 billion.
ThredUp has a different model, taking control of goods from consumers with an intricate back-end operation that takes bags of clothes from cleaned out closets, sorts them, recycles some, photographs others and posts them for sale. Consumers can then get a cut of the sale and their place in a more ecologically sustainable fashion process.
Patricia Nakache, chairperson, told WWD: “Our infrastructure is highly-scalable. Our distribution centers can currently hold 5.5 million items, and we expect this to increase to 6.5 million items by the end of 2021. We currently have the ability to process more than 100,000 unique SKUs per day, and we expect our daily processing capacity to increase over time. Since our founding, we have processed over 100 million unique secondhand items, and we are rapidly expanding our capacity to serve our buyers, sellers and [retail as a service] partners.
“ThredUp’s business may be harder to build in the short-term because we’re taking on work for the customer, but I believe it will have a lasting long-term impact,” Nakache said.
The company’s revenues rose 14 percent last year to $186 million, with 1.24 million active buyers, as net losses tallied $47.9 million.
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