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The company, known for being a social platform to buy and sell fashion and accessories, confidentially filed to go public in September. And with the year coming to a close, it was uncertain whether the company’s S-1 would be publicly released in 2020.
Now, the numbers are out. Let’s dive in.
Poshmark reported net revenue of nearly $192.8 million for the nine months that ended on Sept. 30, 2020. That’s up about 28 percent from the same period in 2019.
Perhaps what’s most notable about Poshmark’s finances is that the company turned a quarterly profit for the first time for the three months that ended on June 30, 2020. Poshmark counts 70 million users on its platform and more than 130 million items sold.
While the company has now experienced being profitable, it hasn’t been totally shielded from the negative effects of the COVID-19 pandemic. In the S-1, the company reported that in the first few weeks of the pandemic in the U.S., it experienced a “significant decrease” in gross merchandise value on its platform. Buyer and seller activity rebounded over the summer, but Poshmark noted that consumer discretionary spending could be affected as the COVID-19 economic situation evolves.
“To the extent that federal and state governmental aid programs initiated in connection with the pandemic are reduced or terminated, consumer discretionary spending would likely decrease, which would have a negative impact on our business. In addition, although the COVID-19 pandemic has accelerated the trend toward eCommerce, it has negatively affected demand for apparel and fashion as retail categories,” Poshmark wrote.
Further, the document said: “Responses to the COVID-19 pandemic such as prolonged work-from-home policies, quarantines, closures, and travel restrictions could continue to depress demand for the products sold on our platform. Even if a virus or other disease does not spread significantly and such measures are not implemented, the perceived risk of infection or significant health risk may adversely affect our business, results of operations, and financial condition.”
Other risks highlighted by the company include its reliance on the U.S. Postal Service, noting how the COVID-19 pandemic has caused shipping delays and “recent news coverage about politicization of, and funding challenges at, the USPS, and reports of significant service delays.”
The company, which is based in Redwood City, raised around $153 million in funding from investors including Menlo Ventures, Mayfield1, GGV Capital, most recently with a $87.5 million Series E led by Temasek Holdings in November 2017. Among the largest shareholders of the company’s Class B common stock are Mayfield, Menlo Ventures and Inventus Capital.
It’s unclear when Poshmark will start trading on the public markets, with December quickly coming to a close with the holidays.
December so far has been a busy month for IPOs. Perhaps most notably, Airbnb and DoorDash both went public this month, and it looks like there’s more action ahead. Besides Poshmark, Affirm and Roblox also filed S-1 statements with the SEC recently, though they are reportedly waiting until early 2021 to make their debut.
Illustration: Dom Guzman
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