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Online clothing retailer Poshmark filed its IPO prospectus on Thursday, after accumulating a profit of over 30 million dollars in the last two quarters.
Poshmark, founded in 2011, is an internet marketplace for used clothing, footwear and accessories. Like eBay, Poshmark connects buyers with sellers, who often list items in their own closet. The company earns money by taking a discount on each transaction.
Poshmark’s filing reaches investors after last week’s DoorDash and Airbnb IPOs, which are also market-based, led to huge appearances on the first day, potentially indicating the public market’s appetite for the business model. The online retailer with Wish discounts followed with IPO this week, although the price of its shares fell from the gate.
Poshmark’s revenue increased 28% in the first three quarters of 2020 to $ 192.8 million, from $ 150.5 million in the same period last year. It reached a profit of $ 20.9 million during this period, after losing $ 33.9 million a year ago.
Gross volume, a key indicator that measures the total dollar value of goods sold online, was negatively affected in the first quarter due to the coronavirus pandemic. It increased by only 9% in the first three months of the year, but returned to 42% in the second quarter, as the activity of buyers and sellers resumed. The company also cited its growing base of active buyers, which doubled in June from two years ago.
Like many online retailers, Poshmark said it has benefited from a flood of demand generated by coronavirus, as local governments have ordered people to stay inside and close retail stores. The market also served as a source of additional revenue for Poshmark’s 4.5 million sellers, the company added.
However, Poshmark said that Covid-19 remains a risk due to the economic impact on consumers and uncertainty about the stability of the economy as a whole.
“Responses to the COVID-19 pandemic, such as extended home policies, quarantines, closures and travel restrictions, could continue to lower demand for products sold on our platform,” the company said in the prospectus.
The filing provides a first look at Poshmark’s financial statements after the company confidentially filed the advertisement in September. He plans to list the Nasdaq under the symbol “POSH”.
Poshmark said it now has 6.2 million active shoppers and 31.7 million active users, most of whom are female 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 lead the bid.
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