CEO Manish Chandra at Poshmark’s headquarters in Redwood City, California: “Our goal is to make shopping personal, not just personalised.”
Image: Timothy Archibald For Forbes
Manish Chandra, 51, dresses the part of a Silicon Valley engineer turned fashion app CEO, pairing his Louis Vuitton belt and Tommy Bahama dress shirt with Adidas NMD sneakers. He bought them all on Poshmark, the social shopping app he co-founded with Tracy Sun (in charge of new markets), Gautam Golwala (CTO) and Chetan Pungaliya (engineering chief). “My first job was working for Intel building databases for semiconductors, and today I help men and women sell shoes,” Chandra says. “Only in Silicon Valley can you have that journey over the course of 30 years.”
It’s an increasingly lucrative trip, largely because of Poshmark, in which Chandra has an estimated 15 percent stake. Poshmark started in 2011 as a way for women to sell extra items from their closets—an eBay for used clothing. It’s now becoming more than that, selling new clothes too, complete with its own wholesale market and fashion entrepreneurs. The company has carved out a niche that feels like window-shopping on a phone instead of the search-to-buy experience on Amazon. People follow each other’s virtual closets full of clothes for sale—a mix of pre-worn and boutique items—and share what they find interesting. It’s a social network of 40 million people, akin to Instagram or Pinterest. The difference: Everything you see is for sale.
About 5 million users, are also sellers on the app. Poshmark, which is based in Redwood City, California, doesn’t hold any inventory; its users sell directly to each other. À la Etsy and eBay, the app has spawned small-scale entrepreneurs, whether professional resellers or bootstrap fashionistas with their own clothing labels. Poshmark takes a 20 percent cut from each sale, and revenue is expected to hit $140 million in 2018. The company, which has over 300 employees and plans to hire 100 more, remains unprofitable as it focuses on expanding into new categories (menswear and makeup) and internationally (Canada will be first). Poshmark has raised $160 million in venture financing at a recent valuation of $625 million, and its anticipated 70 percent revenue growth over 2017 (which matches its growth from 2016 to 2017) earned it a spot on Forbes’ Next Billion-Dollar Startups list.
Poshmark makes up only a fraction of a sliver of the $600 billion US ecommerce market. But the demand for discount clothing is huge. Offline, nine in 10 shoppers buy from discount stores, and 75 percent are looking for deals on clothing, according to the National Retail Federation. With online retail growing about $4 billion every quarter, Chandra thinks he’s finally timed his idea of building a social shopping network right.
His first startup, Kaboodle, in 2005, was his initial attempt to combine social and shopping. At launch, the theme was home décor. A so-called “bookmarking” site, Kaboodle let people collect links to items they wanted to buy and share them with friends. Kaboodle was moderately successful: Chandra sold it to Hearst for a reported $30 million in 2007. But real social shopping would have to await the mass adoption of social networks.
Poshmark was his next idea, built on a pop-culture junkie’s belief that the way you could introduce people to new fashions is through people, not brands. “I am probably more in tune with pop culture as a 51-year-old guy than many people would realise,” Chandra says. “I could tell you the latest lines to Drake’s song, but I probably couldn’t tell you what’s happening in enterprise software right now.”
His career started, nevertheless, in enterprise software. Chandra grew up in India and spent the first 15 years of life moving every two to three years to follow his father’s career as a judge. He applied to the elite Indian Institute of Technology Kanpur to study computer science. He got his master’s at the University of Texas at Austin. After graduating in 1989, he worked at Intel on databases for a year, before leaving to work at a series of database startups in California and got his MBA from UC Berkeley in 1995.
“ Discovery-based shopping is the best way to be differentiated from Amazon and Alibaba.”
Hans Tung, managing partner, GGV Capital
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(This story appears in the 18 January, 2019 issue of Forbes India. To visit our Archives, click here.)