Online fashion marketplaces are picking up steam these days, quickly replacing the traditional auction model pioneered by eBay, as a way to consign, and sell your clothes. Twice, an online consignment shop for women’s clothing, is announcing a huge new investment today, raising $18.5 million led by Jeff Jordan of Andreessen Horowitz, with participation from existing investors IA Ventures, Felicis Ventures, Lerer Ventures and WTI. Angel investors Mike Lazerow, Joe Greenstein and Maria Thomas also invested. The round brings Twice’s total investment to over $23 million.
Twice competes in the same space with thredUP, Poshmark, Threadflip, 99Dresses, and others that invite women to resell their gently used clothing for extra cash. However, it’s most similar to thredUP among this group, because it doesn’t offer a peer-to-peer marketplace, but rather an online store where users send in items directly to the company itself. Once there, the clothing is then reviewed, measured, photographed and placed online for sale.
This makes a big difference in the user experience of the site, because all merchandising and photos are professionally done (and thus tend to lead to higher conversions), and the buyer is receiving customers from Twice vs. the seller. As co-founder Noah Ready-Campbell tells me, the startup aims to make the buying experience feel like the purchaser is buying brand-new clothes on a site. In fact, Twice has modeled its consumer and customer experience on Zappos.
Another differentiator from some of the higher-end marketplaces like TheRealReal or ShopHers, is that Twice focuses on reselling clothing from mass-market brands, such as Banana Republic, Gap, J Crew and Ann Taylor, versus high-end fashion designers. The average price point for an item of clothing on the site is $20.
In terms of the consignment experience, a potential seller can request a prepaid bag to be sent to them that holds up to 30 garments or print a free label and use their own box to send in clothing items. Once Twice receives the clothes, they’ll price the items that are fit to sell. The startup actually takes into account a large amount of data, including pricing on other sites, how quickly a specific brand sells, original pricing, condition of the clothes and more to determine the price of items. Ready-Campbell says that the average woman will send in the range of 17 items, and Twice will accept around 11 things to be sold, and others will be given to Goodwill for donation. He adds that 95 percent of women accept the prices Twice assigns to the clothes.
Twice then sends a lump sum check or PayPal deposit for the worth of the clothes to the seller, and then marks up the clothes slightly on the Twice marketplace so they can make a small profit. Sellers can also choose to get a Twice gift card for their clothes, and receive a 25 percent increase in the value of the card if they choose this option to spend the money on the marketplace.
In a lot of ways, Twice is bringing the white glove service of consignment to the masses and tackling a huge market at the same time by going after the middle market of clothing. In two years, Twice has accumulated hundreds of thousands of customers, and grown over 500 percent with little to no marketing spend. The startup recently launched iPad and iPhone apps, which are seeing thousands of downloads per day (and were featured by Apple).
As a side note, I’ve purchased items on a number of these marketplaces, including both high and mass market apparel, and have generally liked my experience. However, my closet is suffering in turn, and it’s time to start selling (in fact it’s one my New Year’s resolutions). What appeals to me about Twice is that I can sell my mass market items, which make up much of the items I want to actually give away. Normally, I would donate this to Goodwill, and I still can, but I can also stand to make a little cash from some of my clothing, of which I will be sorely tempted to simply put back into Twice.
We’re told the new funding is being used to aggressively hire talent and expand operations. And Twice just signed a lease for a warehouse in the Mission district of SF.
The clothing marketplaces arena is especially competitive, but Jordan betting on Twice is particularly interesting. Jordan, who was the former CEO of OpenTable and President of PayPal, has talked a lot about what e-commerce 2.0 looks like, and backed Zulily, one of the more successful e-commerce plays over the past five years. Opportunities for Twice could be additional curation, new verticals and more.