Yet another resale platform has made a stellar debut on the stock market.
Shares of ThredUp Inc. opened 30% above the listing price on Friday, its first day of trading on the Nasdaq Global Select Market under the ticker “TDUP.” The Oakland, Calif.-based retailer had priced its initial public offering at $14 — the higher end of its previously announced range — and its stock is currently trading at more than $18. It sold 12 million shares and raised $168 million at a valuation of about $1.3 billion.
With the IPO, investors appeared to remain bullish on the booming resale market, which is estimated to swell from today’s $7 billion to $36 billion in the next five years, according to ThredUp’s annual Fashion Resale Market and Trend Report. (The secondhand market as a whole is set to hit $64 billion by 2024.)
“ThredUp set out to transform resale, making it easy to buy and sell secondhand clothing. As a result, we’re ushering in a more circular future for fashion by helping new waves of consumers, brands and retailers take steps toward sustainability,” co-founder and CEO James Reinhart said in a statement. “I am proud that ThredUp creates a positive environmental and economic impact and believe this is just the beginning.”
As e-commerce increasingly overshadows traditional retail, resale has continued to expand — thanks to millennial and Gen Z consumers who are keeping a closer eye on their carbon footprints, as well budget-conscious shoppers looking to nab quality wares at more affordable prices.
The COVID-19 pandemic has also given resale a boost. With more shoppers seeking bargains from home, ThredUp reported that online secondhand is positioned to grow 69% between 2019 and 2021, while the broader retail sector is projected to shrink 15%. It shared that it has maintained 20% growth since shelter-in-place orders were put into place, while other online shopping destinations dipped 24%.
Last year, ThredUp saw $186 million in revenues, or a 14% gain from the prior year, according to a filing with the Securities and Exchange Commission. At the end of 2020, it had 1.2 million active buyers (or shoppers who have made at least one purchase in the past 12 months) — up from the previous year’s 24%. On average, those customers visited the website — which features about 2.4 million listings from more than 35,000 brands — roughly six times a month and placed 3.2 orders in the year.
ThredUp is not the only secondhand shopping platform to go public and see its shares skyrocket on its debut: Poshmark Inc. shares rose 141% on its first day of trading in mid-January, ending the trading day at $101.50. (The IPO raised $277 million.)
This story has been updated with a comment from ThredUp CEO James Reinhart.