ThredUp's bright turquoise bags helped clean out millions of dollars' worth of unwanted clothes from the depths of America's closets. Now flush with a new injection of cash, the online clothing reseller wants to speed up operations, hire more staff, and get more people flipping their wardrobes online.
ThredUp raised $81 million in venture funding in a round led by Goldman Sachs Investment Partners, the company announced on Thursday, bringing its total funding to more than $125 million. The Series E round also included existing investors Highland Capital Partners, Trinity Ventures, Redpoint Ventures, and Upfront Ventures.
Founded in Cambridge, Mass., in 2009, ThredUp stocks up piles of garments mailed in by its users and sifts out the best of each crop, typically about half of what comes in. Customers get an upfront payout for cheaper items, or receive a consignment for more expensive goods. The secondhand clothes are then sold on ThredUp's website at discounted rates. Clothes that aren't accepted are either returned to the sender, recycled, or donated to charity.
ThredUp Chief Executive Officer James Reinhart said he plans to devote the new funds to distribution and improving the website. The company will open two new distribution centers in Illinois and Georgia. These, in addition to its existing pair of operational hubs in Pennsylvania and California, will give the company the ability to get clothes to customers faster than ever, said Reinhart.
"That's the core investment," Reinhart said of the upcoming centers. "Time in transit is proving to be a big deal."
In August, 1.8 million people visited ThredUp's website, up from 700,000 a year prior, according to the company. ThredUp, now headquartered in San Francisco, plans to hire 1,000 new employees by the end of next year as it grows.
Several online fashion resellers have raised funding from venture capital firms this year. Luxury reseller the RealReal raised a $40 million round in April while Poshmark followed weeks later with a $25 million round of its own. Vestiaire Collective, a European competitor that recently made the leap to the U.S., raised $37 million in September.