Mobile shopping app, Poshmark announced that they had successfully secured a $12 million second round of funding. This marks a significant achievement for the company that has provided a platform to smartphone users to sell and purchase used clothes that got its start just two years ago.
All of its existing backers including Inventus Capital, SoftTechVC and Mayfield Fund took part in this funding round led by industry heavyweight Menlo Ventures. With the close of this round, California based Poshmark has been able to secure a total of $15.5 million in funding since its inception.
Although Poshmark is facing tough competition from rival startups like Twice and Threadflip, the company has managed to secure a decent amount of money, which clearly indicates that this California based firm is a top performer in its, which is getting more and more crowded with each passing day.
The main concern for such firms lies in whether Poshmark and other companies which are following a similar business model are ensuring that customers are not just browsing or listing clothes but rather making purchases as well. Although Posmark charges 20 percent to sellers and $7 to buyers for shipping, the previous figures of the mobile shopping app revealed that the company was not sure how many customers were making purchases.
In August the CEO of Poshmark, Manish Chandra quoted that the sell through rate was between 15 and 30 percent. However, they refused to give in the latest numbers. Regardless of this fact, the original backers of the startup have chosen to re-up their bet on the company, meaning there must be something to the startup and its future prospects.
In spite of this issue, Poshmark is focusing to further boost its sales and reach, as the company has finally launched websites, thereby allowing customers to make purchases using this medium as well. Those looking to list items still have to use its iPhone app.
Source: AllThingsD, Gigaom
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