thredUP:
Looking Picture-Perfect
Today thredUP announced an exciting milestone: an $81 million growth financing led by Goldman Sachs. Trinity led thredUP’s Series A financing 5 years ago, and we wanted to take this moment to congratulate the team and reflect on the company’s journey to this point. Startups often begin their lives like fuzzy pictures where you can make out some of the major features, such as the founders, market size, and customer pain point, but where there is blurriness around how the business will actually work; over time, with perseverance and hard work, the startup’s “picture” comes into sharper focus. Indeed thredUP has followed this trajectory.
When we first invested in thredUP, the company had half a dozen employees and was based in Boston, though the team was willing to move out to the Bay Area. The parts of the thredUP picture we could make out at the time were the following: the CEO James Reinhart was a charismatic leader, passionate about improving second hand clothes buying, and a deep and careful thinker about the consumer experience; he had attracted a talented group of co-founders and initial employees; and the size of the market for second hand clothes as proven by brick and mortar retailer, Savers was significant. As a mother of three, I was living first hand the pain point of perpetually cleaning out the clothes in my kids drawers and having few attractive alternatives for getting rid of them.
But many specifics around thredUP’s business model were not yet clear. thredUP started as a peer to peer box-swapping model but there were two critical unknowns: how many consumers would go to the effort of selling their own items directly to others, and can the buyer experience be consistent enough to drive high repeat purchase behavior? The answers turned out to be not enough, and no. So thredUP pivoted to an “augmented marketplace” model whereby it does all the work for the seller and ensures a consistent experience for the buyer.
Over the last few years, thredUP has achieved a number of milestones that have brought greater clarity to the potential of the business. Perhaps most importantly, the company expanded its leadership team to include world-class operations and marketing talent. It then expanded beyond kids’ clothes into women’s clothes and accessories and opened a second distribution center on the east coast. At the same time, thredUP relentlessly fine-tuned the economic levers of the business to drive profitability while providing great value to suppliers and buyers.
Over the years, thredUP’s mission has remained consistent: to inspire a new generation of consumers to think second-hand first. Today the company is clear on how it will fulfill its mission and, thanks to this growth financing, it has the fuel in its tank to deliver.
The thredUP opportunity is now crystal clear — and it’s a beautiful picture!
