Redwood City, Calif-based online fashion platform Poshmark Inc. POSH, set terms for its initial public offering on Wednesday, with plans to offer 6.6 million shares, priced at $35 to $39 each. The company would raise $257.4 million at the top of that range.
The company plans to trade on the Nasdaq under the symbol “POSH.” There are eight banks underwriting the deal, led by Morgan Stanley, Goldman Sachs and Barclays. Trading is expected to begin next week.
Days after Wish parent ContextLogic Inc. /zigman2/quotes/223233051/composite WISH -1.05% began trading, Poshmark Inc. /zigman2/quotes/223776918/composite POSH -1.98% , an online marketplace that sells clothing, accessories, beauty products and items for the home, filed to go public .
Poshmark has filed at a time when e-commerce is booming, due to factors including in-store shopping restrictions related to the COVID-19 pandemic and an accelerated consumer migration to digital retail.
Poshmark launched in 2011 and is based in Redwood City, Calif. Manish Chandra is a co-founder of the company and serves as its chief executive and board chairman.
Among those on the company’s board is Grand Slam tennis champion Serena Williams.
As of Sept. 30, Poshmark had 31.7 million active users, defined as those who have logged on to the marketplace in the past 12 months; 6.2 million active buyers, defined as those who have purchased at least one item over the past year; and 4.5 million active sellers, people who have listed an item in the last 12 months.
Poshmark’s customers skew young, with 80% falling into the millennial or Gen Z demographic as of Dec. 31, 2019. Users spend an average of 27 minutes per day on the marketplace, and active buyers placed an average of 6.3 orders in 2019.
Poshmark calls itself a “social marketplace,” one that uses features found on social media sites including “likes” and “comments” to foster engagement. The company said there were more than 56 million social interactions on the marketplace each day in 2019, with social interactions per active user up 34% compared with 2018. Proprietary technology facilitates these social interactions.
Poshmark’s marketplace includes both new and secondhand merchandise, with more than 201 million items on sale as of Sept. 30.
A recent Cowen & Company report, which also relies on data from the ThredUp 2020 Resale Report , forecasts that shoppers will spend 52% more on secondhand items over the next five years, with online resale expected to grow from $7 billion in 2019 to $37 billion by 2025.
Besides ThredUp, eBay Inc. /zigman2/quotes/204653455/composite EBAY -1.76% , Farfetch Ltd. /zigman2/quotes/203824836/composite FTCH -3.97% and RealReal Inc. /zigman2/quotes/212846592/composite REAL -3.43% are among the growing list of online retailers selling secondhand goods.
Poshmark includes Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN -0.81% , Walmart Inc. /zigman2/quotes/207374728/composite WMT -0.64% , eBay, Etsy Inc. /zigman2/quotes/202790087/composite ETSY -3.09% , Shopify Inc. /zigman2/quotes/209033712/composite SHOP -5.13% and Facebook Inc. /zigman2/quotes/205064656/composite FB -1.29% among its competitors.
Poshmark sellers are charged a flat 20% fee on items sold for $15 or more, or a flat rate of $2.95 for items sold for less than $15.
“We win when our sellers win; we earn our revenue based on a simple fee from each successful transaction that is conducted on our marketplace,” the prospectus said.
In 2019, Poshmark had $205.2 million in revenue, up from $148.3 million the previous year. Losses for the year were $48.7 million, up from $14.5 million in 2018.