Startup Swap.com Raises $20 Million in Financing
December 08 2016 - 8:50AM
Dow Jones News
Online consignment shop Swap has raised $20 million in financing
to expand its marketplace for used clothing.
Swap.com on Wednesday said the round of funding, its largest so
far, would help grow its business connecting customers across the
country with sellers who mail clothing in bulk to the company's
vast warehouse in the Chicago suburbs.
Juha Koponen, co-founder of the four-year-old company, said
Swap's 1.5 million-item online inventory is especially popular with
customers in rural areas with less access to malls and big-box
stores.
"It's an industrial approach to selling pre-owned items," said
Mr. Koponen, a nuclear physicist by training, who helped launch the
startup and moved to the U.S. from Finland this year.
Consumers are doing more of their shopping on websites and apps.
Online spending on Thanksgiving and the following Friday jumped 18%
this year to $5.27 billion compared to last year.
Consumers use sites like Craigslist Inc. and eBay Inc. to sell
everything from secondhand clothing to furniture. Newer apps like
Letgo and sites like Chairish cater to tech-savvy or more tailored
audiences for used electronics and secondhand home decor.
Mr. Koponen said Swap is competing less against those e-commerce
firms than against retailers like H&M Hennes & Mauritz AB
for fashionable shirts and slacks for an average of $7 an item.
This week the website advertised an ugly sweater sale, targeting
college students and others who mark the holiday season by donning
gaudy knitwear from the '80s and '90s. A pair of red women's skinny
jeans from J.Crew were on sale for $8.
Swap charges its consignment sellers $1.50 plus 30% of the sales
price. The site lists some 1.5 million items at a time, from a
warehouse inventory of about 2.5 million. Some items too dirty or
damaged to sell again are recycled or sold to exporters.
Mr. Koponen wouldn't say how much revenue Swap generates or
whether it is profitable. He said revenue more than doubled this
year over 2015 and that the site works with tens of thousands of
sellers.
The new funding, led by eEquity, a Swedish private equity group,
is the largest injection to date in a business that previously
raised about $30 million, according to the company. Mr. Koponen
said Swap will expand its staff and marketing efforts from an
office in downtown Chicago.
"What we have now is a really strong operational engine," Mr.
Koponen said. "We just want to make everybody aware."
Write to Patrick McGroarty at patrick.mcgroarty@wsj.com
(END) Dow Jones Newswires
December 08, 2016 08:35 ET (13:35 GMT)
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