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Mobile Clothing Marketplace Poshmark Raises Closet Full of Cash

EBay used to be the only place where women could buy and sell used clothing online. But in the past few years, a new group of upstarts have emerged (and consolidated) to create mobile-focused communities for buying and selling second hand clothing and accessories.

Poshmark is one of the largest and most well-funded of the group, with millions of shoppers and sellers. On Wednesday, it announced $25 million in new funding from new investor GGV Capital along with previous investors including Mayfield, Menlo Ventures, and SoftTech VC.

Overall, Poshmark has raised $70 million.

Poshmark, which debuted in 2011, was early to the mobile shopping market, launching its marketplace first on mobile phones and then expanding to desktop in 2014. The startup is taking a more community-focused approach that typical retailers by holding events for its sellers and buyers in various U.S. cities.

Co-founder and CEO Manish Chandra said that the site’s community focus is what’s helped it add hundreds of thousands of new sellers every month. Since opening, 1.5 million women have sold items through the service.

Poshmark makes money by collecting transaction fees that can be as much as 20% of an item’s sales price. The company also processes payments and helps coordinate shipping through the U.S. Postal Service.

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While Chandra declined to reveal exact sales numbers, he said that Poshmark’s revenue tripled from 2014 to 2015. The average user spends 25 minutes in the Poshmark app per day, and opens the app seven to nine times daily, he added.

Poshmark’s funding comes at a time when online consignment sites are facing consolidation because of competition from larger sites and established companies, such as eBay. Twice, a venture-backed clothing reseller, sold to eBay in a fire sale last year. Tradesy bought rival e-commerce site Shop-Hers. Threadflip closed its doors earlier this year.

But Poshmark is betting that new vertical categories like children’s clothing and new types of sellers may continue to help it grow. In the fall, the company partnered with several fashion labels to let sellers buy merchandise from them at wholesale prices that they can then sell for a markup on the site.

“From a mobile shopping perspective we feel that we are in a good position,” said Chandra.