OfferUp, a four-year-old, Bellevue, Washington-based mobile-first marketplace that’s trying to take on stodgy – albeit stubbornly successful – Craigslist, is making a big media push right now.
The reason, in part: so reporters will stop calling to ask how much the company has raised. Recode reported back in March that OfferUp was raising between $60 million and $100 million at a $500 million valuation. It was close, too, according to cofounder and CEO Nick Huzar, who says OfferUp has actually raised three rounds of funding that total $93 million. (Investors include Jackson Square Ventures, T. Rowe Price Associates, Andreessen Horowitz, Coatue Management, Tiger Global Management, Vy Capital, High Line Venture Partners and Allen & Company.)
The company also seems eager for everyone to know that it’s ready for prime time — and that its product is bigger and better than another mobile app company with which it competes, Toronto-based VarageSale, backed by Sequoia Capital, among others. (If all the media should help with its next round of funding, so much the better.)
We sat down in San Francisco with Huzar and his cofounder, Arean van Veelen, last week to talk about all. Our chat has been edited for length.
TC: People have been trying to suss out your funding situation for months. Why talk with reporters now?
NH: When you’ve been growing as fast as we have, you’re pretty focused just on managing that growth. A year ago, we had 15 employees; now we have 67. Our business has grown 5x. We’ve seen $2.9 billion in transaction on the platform so far this year.
TC: How many users do you have, and how often do they return to the platform?
NH: We don’t talk about registered users and [monthly active users], but our app has been downloaded more than 12 million times. It ranks around the 51st most-downloaded app, behind all the social games and everything else.
TC: Do you enable people to transact using your platform?
NH: Closing transactions happens very similar to Craigslist — in cash. We feel there are a lot of opportunities for us to add to and build on that experience, but we’re not monetizing today as a business.
TC: Why not at least partner with a payments company?
NH: A lot is happening in the payment space, and we’ll continue to explore numerous things. We’re chewing on a lot with our investors.
TC: One of your competitors, VarageSale, uses volunteer moderators to accept people onto the platform and sort of vouch that they are who they say they are. What’s your model?
NH: The way we approach the market from a trust and safety standpoint is very different. We’re very focused on getting everyone to use the product, and our focus is on location. Right now, we ask for your driver’s license, which you can scan. We also require a connection to a social network like Facebook. We do have moderators, but we use them to guarantee a good user experience and to ensure there aren’t weapons or things like that on the platform. And they aren’t volunteers.
TC: VarageSale also prides itself on a Twitter-like feed around items that it says builds interest in them, as well creates community.
NH: We’ve stayed away from that because with open comments, one minute you’re chatting about an item, now you’re using the platform to chat, and suddenly you’ve just given away your phone number [for all to see]. We have internal messaging instead. You can reach a seller or buyer directly without having to give out that information. We think one to one versus one to many is [safer].
TC: For readers who haven’t tried OfferUp, how does it work?
NH: It centers on where a user is and what the people around are selling. Right now [pulls out phone], I can see roughly where this chair [for sale] is relative to me. I can learn more about who the [seller] is and if I want to make him an offer, I can just message him or I can just accept full price. The seller can then decide whether to sell to me or to other people who’ve messaged him.
TC: How does it work for the seller?
NH: On Craiglist, it takes at least 10 minutes to post something for sale. With our app, you take a picture, punch in a category and a price, then decide whether or not to share it with your friends or [more publicly on] the platform, and you’re done. You go back to your life, and people start to engage.
TC: Do you assign your growth to how easily people can post things?
NH: There were always buying through Craigslist, but for a lot of people, selling was just too much work. There was a whole audience of people who weren’t selling and who are using OfferUp, and the degree to which we’ve expanded the market to date is just the tip of the iceberg.
TC: You have plans to refine much of what you’re doing, as well as to expand internationally. Are you talking again with investors?
NH: We get a lot of interest all the time, and when it comes to the funding question, we’re always entertaining [ideas] and talking with investors.