LetGo raises $175 million to bring total to $375 million
17 Jan 2017
General classified app LetGo just leapfrogged over its main U.S. rival OfferUp with a new financing round of $175 million U.S..
LetGo has some big backers with deep pockets: the lead investor on LetGo’s previous round, South Africa-based internet and media powerhouse Naspers, led the latest one as well. Also included: venture capital firms Accel Partners, Insight Venture Partners, New Enterprise Associates and 14W.
LetGo, which is headquartered in Barcelona, has now raised a truly astounding $375 million in total so far – astounding given that neither LetGo nor OfferUp charges for their service.
(Mercari, the Japanese classified app whose U.S. version is No. 3 in the market, does take a transaction fee and says it is profitable – see our profile in CIR 17.23, December 15, 2016.)
Seattle-based OfferUp’s most recent venture capital injection was $130 million in November of last year, which brought its total to $220 million.
At the end of our article on that round, we wrote “Let the battle begin.”
We didn’t realize how right (or how soon) that would be.
LetGo co-founder Alec Oxenford was upbeat in announcing the latest funding.
“We’ve grown much faster than we expected,” he said. “All of our metrics look better than we thought they would at this point, so our investors decided it was a good idea to continue on this trajectory and increase commitments.”
Those metrics include a transaction total the company expected to reach $23 billion by the middle of 2017. OfferUp said it expected to top $14 billion in transactions in 2016 – no predictions yet for 2017.
LetGo adds that it has racked up more than 45 million downloads since it launched in 2015. OfferUp, by contrast reports on its website 23 million downloads. However, LetGo is global, with operations in a number of countries, while OfferUp is still U.S. only.
That may not be for long. OfferUp CEO Nick Huzar said in November, “We are the dominant player in the U.S. and we also have global ambitions”.
With the new financing, LetGo won’t need to turn a profit any time soon. But, Oxenford told Bloomberg that LetGo will start trying to make money from its services “in the coming years”. OfferUp’s Huzar said, similarly cryptically, that his company is “experimenting with monetization”, but nothing is set yet.
LetGo investor Fabrice Grinda told The Wall Street Journal in August 2016 that he thinks LetGo investor Naspers “will spend whatever it takes to win.”
As for OfferUp, well, we’re just waiting for the next cash-filled shoe to drop.
We looked at all the major classified apps (which also include EBay’s Close5 and 5Miles, which is backed by Chinese investors with ties into Alibaba) in our General Classified special report (CIR 17.20, October 31, 2016).