The shares of ThredUp Inc. opened 30% above the listing price during their market debut on Friday, an early sign that investors remain optimistic about online secondhand retail.
The Oakland, California-based retailer’s stock started trading at $ 18.25 after settling at $ 14, which was the high of its previously announced range. At the listing price, ThredUp, which sold 12 million shares, raised $ 168 million at a valuation of approximately $ 1.3 billion.
ThredUp will use the proceeds to expand the business, including adding new categories, and make new investments in the company’s operating platform and technology, co-founder and Chief Executive James Reinhart said in an interview on Friday. The IPO is “just another confirmation of the market opportunity, and ThredUp is playing in the biggest, thickest part of the market at our price,” he said.
ThredUp, which sells women’s and children’s clothing, posted $ 186 million in revenue last year, up 14% from the previous year, according to a filing with the Securities and Exchange Commission. The company lost $ 48 million last year, compared to a loss of $ 38 million in 2019.
The company said it had 1.2 million active buyers at the end of last year, an increase of 24% from the previous year. Those shoppers visited ThredUp an average of six times a month and placed 3.2 orders a year. The company defines active buyers as customers who have made at least one purchase in the last 12 months. “Customers will stay engaged on our platform and continue to shop at higher rates,” said Reinhart. “I think it shows remarkable resilience.”