Lead book-running managers for the IPO consist of financial services companies Goldman Sachs, Morgan Stanley, and Barclays. Other managers include businesses William Blair and Wells Fargo Securities, among others. For 30 days, ThredUP will offer underwriters the opportunity to purchase up to another 1.8 million shares. The startup ecommerce business estimates the offering to be priced between $12 to 14 per share, so the ThredUP IPO could potentially raise up to $168 million in new capital. After the registration goes into effect, the startup company will trade under the “TDUP” ticker symbol.
Sustainability Through Digital Thrifting
ThredUP was founded in 2009 by entrepreneurs James Reinhart, Oliver Lubin, Chris Homer, and Dan DeMeyere. With a mission to reduce waste in the fashion industry, the resale ecommerce business for women’s and youth apparel was born. ThredUP intends to extend the lifespan of clothing and accessories that would otherwise be discarded by providing a simple way to resell your old items.
Users start by cleaning out their closets. The startup business provides sellers with a free clean-out bag or prepaid shipping label for boxes. Users simply gather up the items they no longer use and ship their package to the ecommerce company to either sell or donate. If users choose to donate, ThredUP will donate $5 for each kit to a charity of choice on their behalf. Otherwise, the startup business will process the shipment and either recycle items not fit for resale at no cost or return the items for a fee.
Once the approved items have been processed and listed, users can set the prices (which are typically significantly cheaper than retail) for their used items on the ecommerce platform built by the resale fashion company.
Secondhand Fashion on the Rise
According to an annual report jointly produced by ThredUP and GlobalData, a third-party research and analytics company, the secondhand fashion market is projected to reach $64 billion by 2024. Despite the impacts of the global pandemic last year, the ecommerce startup still reported 20% growth from March through May in 2020, down from the 43% demonstrated earlier in the year.
ThredUP is not without competition in the growing resale business. Poshmark, another ecommerce platform peddling secondhand fashion, recently completed its own IPO with an initial valuation exceeding $3 billion.
About the Author
James White is a Michigan State University graduate with a B.S. in Environmental Biology. He is interested in reporting emerging trends in technology, especially with regard to alternative energy and environmental conservation.