After a Mammoth IPO, Where Does Poshmark Grow?

CEO Manish Chandra has been one step ahead of the mobile shopping revolution. Can he sustain that growth in the public markets?

JP Mangalindan

January 28, 2021

After a Mammoth IPO, Where Does Poshmark Grow?
Poshmark leadership team, from left to right: Chetan Pungaliya (Co-Founder, SVP of Engineering), Tracy Sun (Co-Founder, SVP of New Markets), Manish Chandra (Founder and CEO), Gautam Golwala (Co-Founder, CTO) (Image courtesy of Poshmark / Jen Kay)

Five years ago, it seemed unfathomable that a purveyor of secondhand clothes would become something of a sensation, but on January 14, 2021, Poshmark CEO and founder Manish Chandra proved skeptics wrong when the company went public. Poshmark stock surged 150% on the first day to $101 before eventually settling around $73 a share nearly two weeks later — $30 more than where Poshmark had priced its shares. The Redwood City-headquartered company raised at least $277 million from its public offering.

The IPO was remarkable for a social commerce platform that’s a veritable online thrift store, letting users buy and sell lightly used clothing items. As of publishing, its stock is trading at double the market capitalization ($5.3 billion) than The RealReal ($2.1 billion), one of its closest competitors, which went public in June 2019. And Poshmark’s public debut comes at a time of significant growth for the company, driven at least in part by shoppers browsing the web during the pandemic. Yet, the company’s fate as a public company is more unclear as COVID-19 tailwinds — such as lower customer acquisition costs and more people willing to buy secondhand clothing online — dwindle.

For 53-year-old Chandra, Poshmark’s IPO brings new possibilities and challenges. The former Intel software engineer and serial entrepreneur, who sold his social shopping site Kaboodle to Hearst in 2007 for over $30 million, co-founded Poshmark with Tracy Sun four years later, betting that the iPhone and Instagram would have a major impact on mobile shopping. The idea of developing a mobile-only virtual thrift store seemed radical at the time: the iPhone was still somewhat early in its lifespan, Instagram had just launched a year before, and app-based shopping was in its most nascent stages. But early Poshmark investors believed Chandra and Sun were onto something, particularly a product that capitalized on social media by integrating social elements, like virtual parties, into the experience.