Rafael Heinrich | Lighterket | Getty Images
Poshmark, an online clothing reseller, filed its IPO prospectus on Thursday after racking up more than $ 30 million in profits in the previous two quarters.
Poshmark, founded in 2011, is an internet marketplace for second-hand clothing, footwear and accessories. Like eBay, Poshmark connects buyers with sellers, who often list items from their wardrobe. The company makes money by cutting each transaction.
Poshmark’s filings are popping investors after last week’s DDShash and AirBnB IPOs, which are also marketplace businesses, resulting in first-day pops, potentially signaling a public market appetite for the business model . Discount online retailer Wish followed up with its IPO this week, though its share price fell out of the gate.
Revenue at Poshmark rose 28% to $ 192.8 million in the first three quarters of 2020, from $ 150.5 million in the same period last year. After a loss of $ 33.9 million a year ago, there was a $ 20.9 million gain over that stretch.
Gross merchandise volume, a key metric measuring the total dollar value of goods sold online, was negatively affected in the first quarter due to the coronovirus epidemic. It rose just 9% in the first three months of the year, but increased 42% with buyer and seller activity resuming in the second quarter. The company also cited its growing base of active buyers, which doubled in June two years ago.
Like many online retailers, Poshmark said it benefited from the flood of demand generated by coronaviruses, as local governments ordered people to stay indoors and keep retail stores closed. The market has also served as a source of additional income for Poshmark’s 4.5 million vendors.
However, Poshmark said that Kovid-19 remains a risk due to uncertainty about the economic impact on consumers and the stability of the broader economy.
The company said in the prospectus, “Reactions to the COVID-19 epidemic such as prolonged work-at-home policies, quarantine, closure, and travel restrictions may continue to drive demand for products sold on our platform.”
The filing provides a first glance at Poshmark’s financials after the company filed to go public in September. It is planned to be listed on the Nasdaq under the symbol “POSH”.
Poshmark said it now counts 6.2 million active buyers and 31.7 million active users, the majority of whom are women and are either Millennials or Gen Z. It lists Amazon, eBay, ETC, Facebook, Shopify, TJ Maxx and Walmart along with its competitors.
Morgan Stanley and Goldman Sachs are leading the offering.
Note: Highly anticipated technology IPOs in 2021 include Instacart and Poshmark