US online fashion startup Poshmark raises $87.5m led by Temasek

Social marketplace Poshmark, a fashion consignment and resale platform, has completed raising an $87.5 million Series D round led by Singapore state investor Temasek Holdings, bringing aggregate equity funding to nearly $160 million.

The round also positions Temasek as a potential strategic partner for its proposed expansion into Asia in 2018.

Other investors in the financing round include MayfieldMenlo VenturesGGV CapitalInventus Capital, Uncork CapitalUnion Grove Venture Partners and Cross CreekAdvisors. Poshmark’s valuation is currently undisclosed.

Investment proceeds from this latest financing round will see the company focus on expanding into new categories and building increasingly data-driven shopping experiences for its community.

The Series D round, which Morgan Stanley advised Poshmark on, will also see the marketplace introduce the Poshmark Stylist Match, an in-app social styling engine that features a voice-enabled skill for Amazon Alexa, Amazon’s personal assistant; this permits real-time styling by its “Seller Stylist” community.

The launch and integration of its voice-enabled social styling engine – the Poshmark Stylist Match – which is accessed via the Amazon Alexa, aims to connect shoppers with Seller Stylists on its platform in order to facilitate deeper customer engagement and a more personalised experience. These stylists – which it claims numbers in excess of three million – are part of its strategy in adapting to the decline of physical retail.

Founded in 2011, the platform claims that users spend up to 25 minutes per day on the platform and hosts up to 5000 different brands, with up to seven million items sold daily. Users are invited to browse friend’s collections and can see what others are buying.

Poshmark takes a 20 per cent commission off each item sold on its platforms and does not purchase inventory. It is reported to be on track to be cashflow positive and on track to grow its revenue to $100 million, though it is not currently profitable. In a 2016 interview with the Wall Street Journal, its chief financial officer Anan Kashyap explained that the firm was building towards an initial public offer (IPO) in the future.

In an official statement, Manish Chandra, founder and CEO of Poshmark, said, “Since day one, we’ve focused on building a highly engaged community, enabling our network of Seller Stylists to deliver a shopping experience that’s personal, not just personalized.”

Temasek Holdings has invested in a number of fashion firms in the 2017/2017 period, having acquired a stake in Farfetch,  as well as purchasing an equity interest in Stone IslandThe investment into such online fashion platforms by Temasek is in response to shifting consumer behaviour, due to a changing demographic profile, as well as changes in the fashion cycle and technical developments that are part of broader changes in the fashion sector. 

A McKinsey report estimates the global fashion industry to be worth $2.4 trillion as at end-2016 and grew between 2 to 3 per cent for that year. Over the 2005-2015 period, the fashion sector saw a growth rate of 5.5 per cent per annum.

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