Online fashion marketplace Poshmark became popular as a way for women to buy and sell clothes harvested from the depths of closets across the U.S. Armed with a new round of funding, the service has its sights on transforming its bestselling shops into truly global fashion boutiques.
The fashion marketplace announced on Tuesday that it has raised $25 million in venture funding, bringing its total funding to $47.2 million. Mayfield Fund, Menlo Ventures, Inventus Capital, Union Grove Venture Partners, Shea Ventures, and SoftTech VC participated in the Series C round. Poshmark, which was founded in 2011 and boasts an army of 700,000 sellers, is also backed by celebrity investors that include Rachel Zoe and Ashton Kutcher.
Founder and Chief Executive Officer Manish Chandra says he plans to use the cash to expand internationally and improve the site's back-end technology. He's also looking to give sellers more access to new, in-season products from prestigious fashion labels via partnerships. "They can become a full-blown fashion boutique, doing hundreds of thousands— perhaps millions of dollars of sales on Poshmark," says Chandra.
Poshmark is a champion of what's been dubbed "social commerce," having created a community of shoppers who can interact with each other within the marketplace. The site also uses algorithms and stylists to match shoppers with merchandise, based on their social activity. Poshmark says it expects to hit $200 million in annual sales if transactions continue at the current rate. Sellers hawk items from across the price spectrum, from $4 Forever 21 earrings to $8,000 Hermès handbags. Some of Poshmark's top-selling brands are J. Crew, Michael Kors, and Tory Burch.
Competition is stiff in the clothing swap market. Poshmark competes with such resellers as Tradesy, Twice, and Threadflip, each with devoted followings. Earlier this month, online luxury consignment store the RealReal raised a $40 million round of funding.