Poshmark, the fashion resale social network, is on track for $100 million in revenue this year, TechCrunch has learned. We hear the company reached $50 million in revenue last year, which means they are on pace to double in 2017.
The company also recently became cash flow positive, with profitability on an Ebitda basis. This is a commonly used, but adjusted measurement of profitability that excludes certain items like taxes and one-time expenditures.
We were told that competitor ThredUp was also on track for about $100 million in revenue last year, but these companies are anomalies in an industry that has seen a lot of disappointment. Threadflip shut down in 2016 and many others are struggling.
Poshmark has a business model that’s different from the rest of the clothing resale startups. It’s not only a social network, but the company also does not buy any inventory, meaning its costs are lower.
Instead, Poshmark makes money by taking a 20% cut from the sales. They are forecasting $500 million in gross merchandise volume, meaning the total dollar value of transactions on the platform for the year.
It is a very competitive landscape and there are no guarantees that Poshmark’s traction will continue. Their model also requires more effort than some of the startups which let you ship your items in a box and be done with them.
Yet with an army of 2.5 million sellers, Poshmark has done especially well with women who like to sell clothing and accessories to their friends. And last year the company introduced men’s and children’s items and CEO Manish Chandra tells TechCrunch these lines are “scaling very rapidly.”
They introduced a significant app update on Wednesday, which allows sellers to act as virtual stylists. They’re calling it the “Posh Dressing Room,” where sellers can recommend items that suit the style of buyers. This will “create a new form of discovery,” said Chandra.
The company has raised over $65 million in the past six years from notable investors including GGV Capital, Menlo Ventures, Mayfield Fund and SV Angel.
Last year they hired a CFO and shared that they hoped to IPO someday. We’re “starting to think about the future” said Chandra, but could not share a specific timeline.
If Poshmark is able to keep up its momentum and reach this milestone, it would be unusual. Few e-commerce companies have made it to the public markets in recent years.
Etsy debuted in 2015, but has struggled to maintain investor appetite. But then there are giants like Amazon which has had a phenomenal run in the public markets.
For Poshmark, we are not predicting an IPO for this year, but possibly someday.
Additional reporting by Matthew Lynley.