Secondhand Clothes Site ThredUp Jumps After $168 Million IPO

ThredUp Inc., the online marketplace for secondhand clothing, climbed 43% in its trading debut after a $168 million initial public offering.

ThredUp, whose shares sold for $14 in the IPO, opened at $18.25 and closed at $20 Friday, giving the company a market value of $1.8 billion. The Oakland, California-based company sold 12 million shares Thursday after marketing them for $12 to $14.

While ThredUp is a favorite of sustainability-minded younger shoppers, its focus on recirculating the contents of home closets gives it cross-generational appeal, Chief Executive Officer James Reinhart said in an interview.

“It’s clear that Gen Z and millennials are an increasing share of customers on our platform,” Reinhart said, adding that lots of Gen Xers and baby boomers use the site, too.

“I think that’s because there’s a collective American conscious that we can’t keep consuming at the rate we are consuming,” he said. “So I think it’s more of a broader human trend to care about the planet and sustainability, and I think we fit right in with that macro trend.”

‘Getting Smart’

Retailers are increasingly taking note of the resale market as it gains momentum, Reinhart said.

“It isn’t a fad,” he said. “I think retailers are really getting smart to this. I think it’s more likely that they become collaborators with resale over time.”

While ThredUp doesn’t have any plans for international expansion, it’s “something we spend some time thinking about,” Reinhart said. “There’s no reason we can’t replicate what we built in the U.S. in other markets around the world,” he said.

ThredUp said it had a net loss of $48 million on $186 million in revenue in 2020, compared with a $38 million loss on $164 million the previous year.

Trinity, Redpoint

The company’s backers include Trinity Ventures, Redpoint Ventures, Highland Capital Partners, Park West Ventures and Upfront Ventures, according to ThredUp’s filing.

The wide range of merchandise on ThredUp -- 35,000 brands from value to luxury -- has helped make it a one-stop shop for buyers and sellers, said Patricia Nakache, general partner at Trinity Ventures.

“We’ve only captured 0.1% of the potential available supply that we can unlock, so this is just the beginning,” she said.

Holders of ThredUp’s Class A stock sold in the IPO will get one vote per share, while owners of Class B shares will get 10 votes for each share and will continue to control the company, according to the filings.

The offering is being led by Goldman Sachs Group Inc. and Morgan Stanley. ThredUp is trading on the Nasdaq Global Select Market under the symbol TDUP.

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