Poshmark, the mobile-first shopping app that lets users re-sell clothes on their phones and in virtual shopping parties, is expected to announce Tuesday that it’s raised a $12 million Series B funding round led by Menlo Ventures, with participation from existing investors Mayfield Fund, Inventus Capital, and SoftTech VC. The round will bring the company’s total funding to $15.5 million, allowing it to keep competing in a crowded clothing-resale market and get more women to buy on the site.
Plenty of companies, including Threadflip and Tradesy, are focused on accessing unworn clothes in women’s closets for sales revenue, but Poshmark has raised a good amount of money and is certainly a top player in this category, even as that category becomes more crowded.
However, the big question for Poshmark and the other fashion re-sale sites is whether women are actually buying items as well as listing and browsing. According to the company’s statistics, there’s no doubt women are listing their clothes for sale, but it’s not as clear if they’re purchasing. In August, CEO Manish Chandra cited a 15 to 30 percent sell-through rate, but refused to list any current number for the site right now.
Poshmark launched on the iPhone in December 2011, and Chandra said the company hopes to use the new funding to expand the business and launch on iPad and Android. Poshmark is iPhone-first, meaning consumers must use their smartphones to get the full experience of both buying and selling clothes, which the company notes as an important factor in engagement. And the company is quick to note its engagement statistics: they say customers (mostly women) open the app about seven times per day for a total of 25 minutes of browsing.
The company also distinguishes itself through “Posh Parties,” or designated times when consumers post and browse items oriented around a particular theme. The company is now hosting 21 of these events per week, during which consumers often upload 35,000 to 37,000 items per day (the typical day has three Posh Parties). Chandra said this, as well as the company’s mobile-first approach and user engagement resonated with investors.