At Poshmark founder Manish Chandra's focus is love not money
Poshmark, an online market for second-hand clothes, has a market value of $7.5 billion following its listing on the Nasdaq Stock Exchange today.
The platform enables sellers to find buyers online for goods which they may have used. Items for sale on the site, which operates in the U.S. and Canada, include apparel, handbags, shoes and jewelry. The company says some of the items for sale are new.
While Chanel, Gucci, Louis Vuitton and other expensive, high-end brands are mentioned, the bulk of sellers appear to list items from Nike, Gap, American Eagle and other mass market brands as well as lesser known brands like Express and Mizrahi. This is also reflected in the value of transactions. In 2019, for instance, the average price of goods sold on Poshmark.com was $33.
The company does not own any inventory and hence carries no risk of unsold items. It gets revenues by charging a 20% fee for sales $15 and over and $2.95 for sales under $15.
Like online retail platforms, from furniture vendor Wayfair, which was co-founded by Indian American billionaire Niraj Shah, to the giant Amazon, Poshmark’s business got a major boost after the COVID-19 lockdown began in March 2020. As a result, Poshmark had a net profit of $22 million on sales of $193 million in the first three quarters of 2020. It lost money previously, including in 2019, when it had a net loss of $49 million on revenues of $205 million.
Poshmark, based in Redwood City, California, was founded in 2011 by Indian Americans Manish Chandra, Gautam Golwala and Chetan Pungaliya, who teamed up with fashion designer Tracy Sun.
The business idea “started right in my closet, looking inside…at the shopping bags that my wife had lying unopened, and from there and the birth of iPhone 4 came the opportunity…to create Poshmark,” chief executive Manish Chandra told TheIce.com.
Chandra says his parents had differing influences on him. “My mom surprisingly was in some ways the creator of ambition. She was very hard driven and hard charging even though she actually worked at home,” he told TheIce.com.
“My father,,,is responsible for my spirituality…my focus on love. He was…very affectionate but also very open minded…who encouraged me and my brothers to live life with sort of no boundaries… for example, I can eat almost anything…because he encouraged us…even though we were a vegetarian household,” Chandra added.
Speaking of his company’s culture, he says, “people want to be respected, people want to feel loved and people want to feel empowered.” Poshmark is “a unique company…(our) mantra is if you focus on love, everything happens whereas if you focus on money, nothing happens.”
Following the public listing, Manish Chandra’s equity stake in the company is worth over $600 million. In 2020, he received a total compensation of $4.8 million; in 2019 $3.7 million.
Prior to Poshmark, Chandra co-founded Kaboodle, an online shopping website where he also served as chief executive. In that job, he experienced his toughest challenge. In 2006, growth at Kaboodle “had stalled…and money was running out. And we had to literally …(ask what is)…the focus of the company.” The focus, Chandra decided, was to help women discover fashion and so the company discontinued its other services.
By “…early 2007, I was literally a payroll away from running out of money. And I had to get in my car, go around Silicon Valley, collect checks of 5 or $10,000 each from a few investors to make the next payroll.”
Chandra managed to revive the business, raise a round of funding and, within six months, sold Kaboodle to Hearst Corporation, the publisher of Cosmopolitan, Elle and other fashion magazines.
Before Kaboodle, Chandra held executive positions at several companies including Sybase, a database software vendor, which was acquired by SAP. Chandra holds an M.B.A. from the University of California, Berkeley, an M.S. in Computer Science from the University of Texas, Austin, and a B.Tech from the Indian Institute of Technology, Kanpur.
Poshmark CFO Anan Kashyap recieves $54 million equity stake
Due to shares issued as part of his employment contract, Poshmark chief financial officer Anan Kashyap has an equity stake worth $54 million. In 2020, his compensation at the company totaled $4.4million; in 2019 it was $1 million.
Kashyap earlier served as Vice President of Finance at GrubHub, a mobile food-ordering company. Prior to GrubHub, he served as Vice President of Finance at KAYAK, an online travel booking site, and as a Vice President in Deutsche Bank’s investment banking group. Kashyap holds an M.B.A. and a B.A. in Business Economics from the University of California, Los Angeles.
Manish Chandra holds onto Gautam Golwala and Chetan Pungaliya
The first step in finding great talent, says Manish Chandra, Poshmark CEO, is that “when you find a good person, you don't let 'em go.” In fact, he got Gautam Golwala and Chetan Pungaliya, who worked under him at Kaboodle, to join him in co-founding Poshmark.
Golwala is Poshmark’s Chief Technology Officer, scaling the data systems and platforms. Before Kaboodle, he worked at Yodlee, a personal finance software company. He holds a Master’s degree in Computer Science from the University of Pennsylvania and a B.A. in Computer Engineering from the University of Pune, India.
Pungaliya, Poshmark’s Senior Vice President of Engineering, also got an engineering degree from the University of Pune. Prior to Kaboodle, he was at OnVantage, managing an engineering team of over 50 employees in the U.S. and China.
Navin Chaddha’s Mayfield owns Poshmark stake worth $1.7 billion
Navin Chaddha, as founding investor through his Mayfield fund, has served on Poshmark’s board since 2011. Based in Menlo Park, California, Mayfield manages $2.2 billion, across six U.S. funds and two India funds.
During his venture capital career, Chaddha has invested in over 50 companies, of which 17 have gone public and 24 have been acquired. Prior to Mayfield, Chaddha worked at Mobius Venture Capital and Gabriel Venture Partners. Earlier he was at Microsoft and co-founded or led three startups including VXtreme, which was acquired by Microsoft, and IBeam Broadcasting.
Chaddha earned an MS in electrical engineering from Stanford University and a B.Tech in electrical engineering from IIT Delhi.
Mayfield’s investment in Poshmark is now worth over $1.7 billion, boosting Chaddha’s reputation among investors and company founders. Chaddha recalls that in 2010, over breakfast at Hobees in Cupertino in the Silicon Valley, “Manish (Chandra) told me that he was going to give up his laptop and just work on his iPhone.”
Poshmark may well be Chaddha’s biggest investment success. Eleven years ago, he says, “Manish (Chandra) had identified that the iPhone and Instagram would serve as consumer behavior accelerators for mobile and social commerce.”
