January 28, 2021
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.