Published by TechCrunch on 9/28/17
LetGo, a startup that has built a marketplace for people to buy and sell used goods, is one of the fastest growing apps in the U.S. at the moment according to comScore, with some 75 million downloads, “tens of millions” of active users, and 200 million listings in the last two years. Now it is gearing up for another stage of expansion. TechCrunch has learned from a source that LetGo has quietly raised another $100 million in funding, at a valuation of over $1 billion.
The money comes only 9 months after LetGo raised $175 million and around 15 months after New York-based LetGo merged with Spanish rival Wallapop in a bid for more scale, and amid yet another $100 million round.
We understand that this latest $100 million closed only about a week ago and involves existing investors. To date, LetGo has raised $375 million, with backers including 14W, Accel, Eight Roads Ventures, FJ Labs, Insight Venture Partners, Mangrove, Naspers, NEA, NextView and Northzone.
A spokesperson for LetGo declined to comment for this story.
LetGo’s large rounds of funding made in quick succession are collectively a sign of how competitive its area is at the moment.
While Amazon and Walmart continue to try to outdo each other in the race to dominate consumer retail commerce, LetGo is among the fast-growing cadre of startups that are taking on Craigslist and eBay in the sale of used goods. Others in the same space include OfferUp, Close5 (which is actually owned by eBay but operated separately), 5miles, and Facebook’s Marketplace.
It’s still a long road to domination, though: LetGo says that its mobile traffic has grown to half that of Craigslist’s on mobile, and one-third of Craigslist’s overall, including web and mobile. It’s not clear how others compare.
Among the startups in that group, OfferUp appears to be LetGo’s closest rival at the moment: like LetGo the company is also growing fast, according to comScore’s research, and it is reportedly in the process of raising $120 million at a $1.2 billion valuation.
LetGo has remained free to download and use as a place to post an item for sale — which is one way of encouraging audience growth of 1,224 percent in the last two years (putting it at number-two behind Snap’s Bitmoji). In fact, its only paid feature right now is an optional one: a fee you can pay to promote your listing.
“We’re exploring a number of other ideas to monetize, particularly through value-added services for users,” CEO Alec Oxenford, who co-founded LetGo with Jordi Castello and Enrique Linares, told TechCrunch last week (and before we got wind of this funding). “Revenue potential for Letgo is huge and we are focused on building a profitable business, but our top priority will always be ensuring Letgo remains a great place to buy and sell.”
For now, the company is trying to differentiate itself from the rest of the pack by its simplicity.
“When you look at the most successful two-way marketplaces like Airbnb, Lyft and Uber, they got there by focusing on simplicity and empowering users. That’s exactly what’s driving Letgo’s success,” Oxenford said.
Like other apps that are disrupting the market for selling used goods on more legacy platforms — be they old-style classified ads, or eBay or Craigslist — LetGo is focused on reducing the number of steps that it takes to upload items, in order to reduce the drop-off in users that takes place when posting involves too many steps; and is hoping to do some of the work for you via AI.
Here, you take a photo of your object, and LetGo uses computer vision and machine learning to identify the object for you, and then automatically title and categorise it. Oxenford said it’s the only one of the used-good marketplace apps to do this at the moment.
And with its DNA partly consisting of mobile, it’s also no surprise that LetGo has made messaging one of its strong suits. Some 3 billion messages have been sent to-date, working out to 9 million daily.