Rafael Henrique | LightRocket | Getty Images
Online clothing retailer Poshmark filed its IPO prospectus on Thursday after racking up more than $ 30 million in profits in the past two quarters.
Founded in 2011, Poshmark is an internet marketplace for second-hand clothing, shoes and accessories. Like eBay, Poshmark connects buyers with sellers, who often list items from their own closet. The company makes money by lowering every transaction.
Poshmark’s filing lands in the womb of investors after last week’s IPOs of DoorDash and Airbnb, which are also marketplace companies, resulted in massive first-day pops, possibly indicating the public market is interested in the business model. Discount online retailer Wish followed suit this week with its IPO, although the stock price fell out of the gate.
Sales at Poshmark were up 28% in the first three quarters of 2020 to $ 192.8 million from $ 150.5 million in the same period last year. It surged on that trajectory to a profit of $ 20.9 million, after losing $ 33.9 million a year ago.
Gross trade volume, an important measure of the total dollar value of goods sold online, was negatively impacted in the first quarter by the coronavirus pandemic. It rose just 9% in the first three months of the year, but rebounded to 42% growth in the second quarter when the buyer and seller business resumed. The company also cited the growing number of active buyers, which doubled in June from two years ago.
Like many online retailers, Poshmark said it benefited from a flood of demand due to the coronavirus as local governments told people to stay indoors and stores were closed. The marketplace has also served as a source of additional revenue for Poshmark’s 4.5 million sellers, the company added.
However, Poshmark said Covid-19 remains a risk due to its economic impact on consumers and uncertainty about the stability of the broader economy.
“Responses to the COVID-19 pandemic, such as extended teleworking, quarantines, closures and travel restrictions, may continue to depress demand for the products sold on our platform,” the company said in the prospectus.
The filing provides the first look at Poshmark’s financial records after the company confidentially filed for publication in September. It intends to list on the Nasdaq under the symbol “POSH.”
Poshmark said it now has 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, Etsy, Facebook, Shopify, TJ Maxx and Walmart among its competitors.
Morgan Stanley and Goldman Sachs are leading the offer.
WATCH: Highly anticipated tech IPOs in 2021 include Instacart and Poshmark