Thousands of garments are stored on a three-tiered conveyor system at the ThredUp sorting facility in Phoenix. Charitable organizations like Goodwill have cited how Marie Kondo's popular Netflix series, "Tidying up with Marie Kondo" has led to a surge of donations. And sites like OfferUp and thredUP also note an uptick in the number of items being sent to them for saleOn The Money Decluttering Tips, Phoenix, USA - 10 Mar 2019

Resale remains on Wall Street’s watch list.

The RealReal went public in June raising $300 million, prompting many to wonder which resale player will be next to make a move in a market where the luxury component alone is seen by CB Insights as surpassing $50 billion by 2024.

Coming under the microscope on Thursday was ThredUp. Wells Fargo published a deep dive on the 10-year-old resale marketplace that predicts further growth opportunities in the space. It even called ThredUp the “number-one player in the space,” due to its estimated $250 million in gross merchandise value and “rapid top-line trajectory,” that was estimated to be growing by 40 percent to 50 percent.

ThredUp’s latest capital raise in August brought its total to more than $300 million (including an undisclosed $75 million) and was earmarked to help the firm ramp up its technology and operations and roll out of its “resale-as-a-service” concept.

The company teamed with J.C. Penney Co. Inc. and Macy’s Inc. just before the back-to-school season and now has a physical presence in over 100 partner stores.

But that’s just an inkling of ThredUp’s larger strategy on RaaS  — and global domination. James Reinhart, chief executive officer and cofounder, told WWD in December that “we plan to double that number in 2020 as more retailers begin to understand the value of incorporating resale and circularity into their business models.”

Are investors already bridging this awareness with potential opportunities?

Although it’s still in the early innings — yes. One early-stage investor said it is a race between Poshmark and ThredUp in terms of who will be next to stage an IPO or take part in some dealmaking in the space. “I would also not be surprised if there were further consolidation in the private market before a public offering (smaller players merging first to get some economies of scale before going public),” the investor said.

Just this week, an industry source familiar with the resale space told WWD he believes ThredUp is the next to go public and that “anyone who is not those three [ThredUp, Poshmark and The RealReal] is for sale.”

Those not in resale’s “big three” include prospects such as StockX, Fashionphile and Rebag, among others — all with “compelling models that investors should be aware of,” according to the Wells Fargo report.

Goldman Sachs Investment Partners, Redpoint Ventures, Trinity Ventures and Upfront Ventures invested in ThredUp in 2015, valuing the company at more than $400 million at the time according to PitchBook Data Inc., but recent figures from Crunchbase put the company closer to a post-money valuation range between $500 million and $1 billion, as of August.

Poshmark is said to have a similar valuation, and speculation came last year of the company potentially going public, but as Bloomberg reported, it would delay its potential plans to IPO until 2020.

Despite a surge of new shoppers seeking secondhand, the Wells Fargo report noted some challenges for ThredUp, most notably: “the most challenging dynamic for ThredUp going forward will be acquiring and holding onto their customers.”

As Manish Chandra, founder and ceo of Poshmark told WWD in September, “Their [sellers’] success is indicative of the widespread growth and future promise of social commerce,” citing now over 50 million users in the U.S. alone.

John Morris, a retail analyst at D.A. Davidson, recently identified resale’s front-runner The RealReal. “With a seamless supply chain, high customer retention and substantial take rate, we expect [The RealReal] to dominate the digital consignment space,” Morris said.

For More Sustainability News, See:

No. 3: Sustainability Is a Given, Not a Goal, While Secondhand and Rental Boom

Resale Offers Lifeline to Sinking Department Store Segment

A Secondhand Opinion: Retail 2020 and Beyond

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