Threadflip, an online consignment marketplace for women’s clothing, is no more as of Wednesday at midnight. An email sent to users explains that the startup, founded in 2011, will shut down operations and roll into clothing rental startup, Le Tote.
With Threadflip, users were able to take photos of their items and list them for sale via its app. The company covered shipping costs but took commission from the sales.
The San Francisco-based startup says it had over 1.5 million members, but that wasn’t enough to keep its business flowing. Co-founders Manik Singh and Jeff Shiau sent a note to users on Tuesday, updating them on the status of Threadflip:
“We have decided to cease operations at Threadflip and join fashion forces and partner with our friends at Le Tote. Through this partnership with Le Tote, our community can now have access to an exciting and exceptional fashion experience.
…As of January 14, 2016, Threadflip will be officially closing operations, including all buying and selling activity.”
The note added that Threadflip users will be able to get a 60 percent discount off their first month of Le Tote, using the coupon code, THREADFLIP. Le Tote, which markets itself as the “Netflix for fashion,” loans its members a handful of garments and accessories each month.
“We’re both attacking the used clothing market in a different way,” said Brett Northart, president of Le Tote. “There was a ton of overlap — the technology and the operations were eerily similar.” The terms of the deal were not disclosed.
Threadflip has faced a lot of competition from similar sites vying for consumer attention – including Vinted, Depop, Yerdle, Tradesy, Poshmark and others, leading to a saturated market in the re-commerce space. Threadflip attempted to set itself apart with a “white glove” service allowing customers to ship their old clothes and sell them on the site.
However, the much larger eBay soon introduced a similar service, which bit into Threadflip’s offerings. Sites such as Twice and now Threadflip, haven’t fared well for that reason.
TheRealReal seems to be standing out as a winner among these sites, with a sizable $83 million in the bank. However, it targets a more niche luxury consignment market that helps differentiate itself from the rest of the pack.
Threadflip raised over $20 million in venture capital from notable investors including Norwest Venture Partners, Shasta Ventures and Lowercase Capital. Its most recent funding was a $13 million Series B in the summer of 2014.
“It’s a competitive space,” added Northart. “It’s tough operationally and you have to fill both sides of the marketplace.”