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Online clothing reseller Poshmark unveiled its IPO on Thursday, having racked up more than $ 30 million in profits in the past two quarters.
Poshmark, founded in 2011, is an online marketplace for second-hand clothes, shoes and accessories. Like eBay, Poshmark connects buyers with sellers, who often list items from their own closet. The company makes money by making a reduction on each transaction.
Poshmark’s presentation hits investors’ laps after last week’s IPOs of DoorDash and Airbnb, which are also market companies, led to big first-day publications, potentially indicating public market appetite by the business model. Online discount retailer Wish continued with its IPO this week, although its stock price fell out the door.
Poshmark’s revenue increased 28% in the first three quarters of 2020 to $ 192.8 million, up from $ 150.5 million in the same period last year. It made a profit of $ 20.9 million in that stretch, after losing $ 33.9 million a year ago.
Gross volume of goods, a key metric that measures the total dollar value of goods sold online, was negatively affected during the first quarter due to the coronavirus pandemic. It increased by only 9% in the first three months of the year, but grew again to 42% in the second quarter when it resumed the activity of buyers and sellers. The company also cited its growing active buyer base, which doubled in June from two years ago.
Like many online retailers, Poshmark said it has benefited from a flood of demand generated by the coronavirus, as local governments ordered people to stay indoors and retail stores closed. The market has also served as a source of additional revenue for Poshmark’s 4.5 million vendors, the company added.
However, Poshmark said Covid-19 remains a risk due to the economic impact on consumers and uncertainty about the stability of the economy as a whole.
“Responses to the COVID-19 pandemic, such as prolonged work-from-home policies, quarantines, closures and travel restrictions, could continue to depress demand for products sold on our platform,” the company said in the brochure.
The presentation provides a first look at Poshmark’s financial information after the company confidentially submitted its release in September. He plans to appear on the Nasdaq with the symbol “POSH”.
Poshmark said it now has 6.2 million active shoppers and 31.7 million active users, most of whom are women and are millennials or Gen Z. It lists Amazon, eBay, Etsy, Facebook, Shopify, TJ Maxx and Walmart among its competitors.
Morgan Stanley and Goldman Sachs lead the bid.
SEE: The long-awaited technology IPOs in 2021 include Instacart and Poshmark