Poshmark

This morning, the social commerce marketplace Poshmark amended its IPO filing with the SEC detailing that it plans to sell 6.6 million shares ranging between $35 to $39. The amendment was anticipated after the company filed its initial Registration Statement last month that did not include these details.

The company expects to raise approximately $223.1 million or $257.2 million if the underwriters’ option to purchase additional shares in its offering is exercised in full.

Poshmark’s marketplace niche has been apparel and footwear only selling in the United States. With the proceeds from the IPO, the company plans to increase its financial flexibility with potential expansion in other retail categories and to grow its reach internationally.

For 2019, Poshmark reported revenue was $205.23 million with a net loss of $1.29 million. However, in 2020, the company turned profitable for the first time after the COVID pandemic sent more shoppers online.

In addition, since its inception in 2011, the online marketplace built a community of 70 million total users, selling over 130 million items, with a value of around $4 billion GMV.

While the company has been in business for nearly ten years, the largest growth has been recent. In its SEC filing, Poshmark stated that $1.3 billion of GMV was achieved in the four quarters ending September 30, 2020.

“The retail industry is undergoing significant transformation as consumer preferences shift away from traditional, physical retail in favor of the selection and convenience of eCommerce. The online U.S. apparel and footwear market is estimated at $90 billion in 2019 and is expected to grow at a 10% compound annual growth rate.”

Poshmark Statement Under Market Opportunity in IPO Filing

Poshmark’s Marketplace Model Different From Competitors

Poshmark will be an interesting company to follow once it goes public as it relies on social commerce, a closer interaction between users, to sell products.

How will the company grow to compete with other better-known marketplaces such as eBay and Etsy which rely on a more traditional online marketplace model? Will eBay and Etsy make changes to their platforms or create an App that focuses on social commerce using the existing platform to power social commerce? Amazon tried it once, and it shut down the attempt.

Poshmark’s strength appears to be that it is starting out as a social commerce platform. It doesn’t have to reinvent itself to attract younger buyers that are more likely to use this kind of commerce interaction. That will be its big advantage.

The company will be trading under the “POSH” symbol on the Nasdaq Global Select Market (NASDQ).

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