- Poshmark shares soared 150% in its trading debut on Thursday, opening at $97.50 per share, more than double the $42 initial price that Poshmark set Wednesday evening.
- Poshmark CEO Manish Chandra sat down with Insider to dish about working with Serena Williams, and the time he almost went to jail because he owed the U.S. Postal Service millions of dollars.
- After the IPO pop, and with share prices holding strong on Day 2 opening at over $94, Chandra's shares are now worth nearly $569 million. The last thing he purchased on the online resell platform was a pair of Balenciaga sneakers.
- Visit Business Insider's homepage for more stories.
Poshmark shares soared 150% in its trading debut on Thursday, opening at $97.50 per share, more than double the $42 initial price that Poshmark set Wednesday evening.
Just after trading started, Poshmark CEO Manish Chandra, sat down with Insider's Senior Correspondent Candy Cheng.
Chandra, 53, didn't always work in fashion or tech. The son of a judge, Chandra grew up in India and studied computer science at the elite Indian Institute of Technology Kanpur, overlapping years with IBM's CEO Arvind Krishna.
He immigrated to the United States in 1987 to obtain his master's at the University of Texas at Austin. After graduation, he took a job at Intel as a software engineer and then worked at a number of startups before he founded Kaboodle, a social shopping service, in 2007.
"In many ways, Manish thought Kaboddle should have become Pinterest because Kaboodle was Pinterest before there was a Pinterest," said Venky Ganesan, partner at Menlo Ventures, and an early investor.
The idea for Poshmark came in 2010, when Chandra identified that the iPhone and Instagram would have a big impact on the future of mobile shopping, said Navin Chaddha, Poshmark's founding investor and largest shareholder.
They met for breakfast at Hobees Restaurant in Cupertino where the idea for an app-based social shopping community was born. "I remember the moment, six months before founding Poshmark, when Manish told me that he was going to give up his laptop and just work on his iPhone," said Chaddha.
In 2011, Poshmark was born and today, the company counts nearly 32 million active users on its platform, including 4.5 million sellers, according to the SEC filing. The company is also profitable, generating revenue of $192.8 million in the nine months ended September 30, up 28% from the previous year, according to the filing.
Today, Chandra's 9.2% stake, which was disclosed in the company's S-1 filing, is worth nearly $569 million, based on the Day 2 opening price of $94.45, including options exercisable within the next 60 days.
Here's a lightly edited version of the conversation:
Cheng: Only one in four Poshmark users are Gen Z. How do you plan to keep this sometimes elusive and often fickle generation engaged on the platform?
Chandra: From day one, the focus has been to serve our community and pay attention to what they need and we've served each set of the community. So when we think of Gen Z, we think of them as an emerging and growing community on Poshmark. They make up a little over 20% of our population. And it's just keeping up in terms of where the word is going. So for example, last year, we introduced short form video on our platform in the form of Posh stories. So we'll continue to innovate, serve and engage.
Cheng: The resale market is expected to be a $64 billion industry by 2025 with lots of competitors in the industry. How do you distinguish your business from The RealReal, ThredUp and other competitors?
Chandra: Very simple. Number one for us is social. We're a social marketplace. We really bring that human connection and do online shopping and that's pretty unique. Nobody is really focused on it. People have taken social networks, applied, shopping, etc.
Number two is we carry no inventory, really empowering our sellers and buyers to connect. And that allows us to both scale 200 million items and flexibility and adaptability to get into new categories.
Number three is our sharp focus on technology and really using that as a force of innovation. So it's about social. It's about being asset light and it's about being technology centric.
Cheng: Serena Williams is on your board. This isn't like what Peloton announced with Beyonce. You see it as much more of a partnership instead of just a simple paid endorsement or marketing campaign. What have you learned from Serena?
Chandra: Serena is a very amazing and inspiring board member. I think number one is how she guides us in terms of a wide variety of areas. She is herself, a fashion entrepreneur besides being an amazing, all rounded tennis player. The second thing is, she is an entrepreneur. The third thing is, she is multi-dimensional. I mean, she is doing so many different things. So her discipline and rigorous discipline is amazing. As we were going through this IPO process, there's multiple meetings, multiple times a day, and Serena attended every single one of them, even as she was traveling to Australia. So that kind of discipline is something we can all learn from her.
Cheng: I spoke to a seller yesterday who was able to quit her full-time job to become a full time buyer on Poshmark. This morning, the number of workers filing for unemployment benefits hit its highest level in nearly 5 months. Have you seen an uptick in sellers in recent months coming to Poshmark due to rising layoffs from the pandemic?
Chandra: Very much so. We make selling a superpower and our focus has been to simplify the world of selling. We do that by really putting everything in the box. So everything from sort of listing all the way to shipping is there and it's integrated. Everything is supported from phone to the web, but of course, phone is super easy. And then we support the ability for you to sell just a few items and then scale it up and keep growing.
So many sellers are using Poshmark as a part-time income. And many of them are using it as a full-time income and many have become, you know, really big time entrepreneurs on Poshmark selling all kinds of stuff. So we see that journey has a pretty continuous journey at Poshmark. And of course, as challenging as the pandemic has been on the health side, it's been very challenging for a lot of people on the income side. And, you know, we're, we're happy to see many people finding Poshmark as a source of income.
Cheng: I spent a lot of time covering The RealReal's new store in downtown San Francisco one week before the shelter-in-place. Luxury is not a main part of your business yet. Do you see yourself transition more into the luxury market and how are you thinking about authentication?
Chandra: We want to be your partner in buying and selling all kinds of products at all kinds of price points. So we have people buying and selling $10 to $20 shirts, and we have people buying and selling thousand dollar handbags and sneakers. And we support that whole life cycle.
Our platform is designed for trust. So a buyer, until they're satisfied, their payment is not released to the seller. And a seller does get their payment until they ship a great product to the buyer. So we sort of make sure that that trust is built into the platform, but for higher end items, luxury items, $500 in over, we actually route the items to a physical authentication process and then send it to the buyer.
Cheng: Like Instagram and Facebook, you allow likes and comments. How much do you have to worry about disinformation and bad actors on the platform?
Chandra: I think social married with commerce is actually a great use case of social compared to the bad things we are seeing. 87% of our purchases are proceeded by some sort of social interaction. So it really starts to bring what you see in the physical world of boutiques happening on the platform.
And that's how we've used social. It's really facilitating that human interactions that happened between buyers and sellers. Now, if you switch the topic to, you know, a social site, lots of user generated content gets posted, how do you moderate that? How do you make sure spam and bad things are out of it? Number one, it starts with our community guidelines and what you can post, what you can't post that allows us to take action.
We use technology and information to make sure that what's being posted is not a problem, whether it is about harm or it's about replicas, is that it's about spam. We want to make sure that that's not happening. Second, we empower our community to help us moderate the platform as well so they can report things.
Third, we have an internal team that moderates that. So, content guidelines, technology, community, and our own people helping us. We don't take these things lightly and we want to enforce and make sure that everything is safe and, and, you know, really serving our ambition, which is about making shopping fun and simple. And also reinventing the future of shopping.
Cheng: What do you make of the recent action by Facebook, Twitter, Snapchat and other social media platforms to ban President Trump's account?
Chandra: I think as an immigrant, I'm really very much focused on supporting equality, justice and democracy. What happened last week was extremely troubling. Coincidentally, the actions that happened last week, happened on the first day of our road show. So we were not even able to focus on it until the evening. One of our core values is embrace your weirdness, which is really, recognize that each person is unique and we need to celebrate each person. So anything that's antithetical to it is not core to my values, not just as an immigrant, but as a human being,
Cheng: Shipping is a critical part of your business. While dramatic, there was one headline about how you almost ended up in jail because of back pay that you owed the United States Postal Service. What is your relationship like now?
Chandra: So if you look at our first value prop to our buyers and sellers, it's simplicity, and our shipping system is designed to make it simple. So when we first started, we tried to explain to USPS, you know, this is how it should work, and this is simple. Some items are light, some items are heavy. But you know, we were so far ahead of our time when we started that it was hard for them to understand.
And so what ended up happening was we launched and we basically put on there about their current shipping system and simplified it for our buyers and sellers. But there are things that were happening where there were some people shipping something slightly heavier, some slightly lighter. So when they came to us, they said, this is heavy. This is light. And that's sort of what led to that, that story that you're talking about, but we turned it as we always do.
We turned every crisis into something that we can learn from and grow. And we started to partner with USPS, and we talked to the Postmaster General, and we turned it into a partnership, which we started in 2014, and it's become such a great partnership.
Cheng: You currently have 501 full time employees. Your HQ is in Redwood City, California, and you have a lease that expires in 2024. Do you expect your employees to go back to the office this year?
Chandra: I love going to the office and physically working in one as so much of our team culture is built around that. So I expect that we would want to have an office, but I expect that remote work is also here to stay. So I expect a hybrid model in the future. But how that looks like, until we actually start to open up the economy and people start to come, it'll be hard to [know] 100% as to how that works. But I expect a hybrid model in the future.
Cheng: You are not just a CEO, but you're also an active buyer on the platform. Can you tell me what the last thing you purchased was?
Chandra: The last thing I purchased was a pair of Balenciaga sneakers.
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