Did LetGo quietly just raise another $100 million?

03 Oct 2017

Did LetGo just raise another $100 million U.S. in funding on the down low? That’s what TechCrunch is reporting.

TechCrunch said it learned about the new round from an unnamed source, and that LetGo’s valuation had risen over $1 billion.

Alec Oxenford with trademark smile. To convince the same company three times to invest in three different start-ups of yours over a period of six years, you gotta be good. All the more so, if the company is Naspers (read note below this story)

The move comes only nine months after LetGo raised $175 million, and 15 months after a merger with rival Wallapop, which included a $100-million round.

That brings the total raised by LetGo to $375 million. TechCrunch said the new round was from existing investors.

LetGo is in a rough-and-tumble battle with a number of well-funded mobile classified apps, in particular, Seattle-based OfferUp and Facebook Marketplace. EBay is in the race, too, although far behind with its Close5 app, as is 5Miles.

Craigslist: nowhere to be found, at least in the app space. LetGo claims its mobile traffic is now half of Craigslist’s (on mobile at least) and one-third of Craigslist overall.

LetGo remains mostly free to use. (There’s a fee to promote a listing, but it’s optional.) CEO Alec Oxenford told TechCrunch (before it reported on the latest financing) that LetGo is exploring “a number of other ideas to monetize, particularly through value-added services for users”. The revenue potential for LetGo, Oxenford added, was “huge and we are focused on building a profitable business”.

(In an interview on CNBC on Sept. 20 (watch here), LetGo founder and CEO Alec Oxenford told the panel: … “we expect LetGo to be profitable two to three years down the line.”)

That said, LetGo still needs to keep it simple. That’s what’s worked at two-way marketplaces, such as AirBnb, Lyft and Uber, Oxenford said, and it’s “exactly what’s driving LetGo’s success.”

As an example of simplifying the selling process, Oxenford pointed to AI that allows LetGo users to scan an object and automatically title and categorize it. Oxenford said LetGo is the only one of the used-good marketplace apps to do this at the moment.

That won’t last for long, but for the moment, it seems to be driving the company’s ability to raise some pretty large – and consistent – amounts of capital.

For context: LetGo launched in 2015, it employs 165 people and has 200 million listings in total (source: LetGo). (We assume this is a total for all the country markets LetGo operates in, and not only for the U.S. – editor.)

Note: In 2010, Naspers acquired a majority stake in OLX from co-founders Alec Oxenford and Fabrice Grinda. In 2011, Naspers acquired DineroMail from founder Alec Oxenford for an undisclosed amount. Then DineroMail was the largest internet payment platform in Latin America; today it is a brand of Naspers subsidiary PayU. In Sept. 2015, Naspers acquired a stake in Oxenford’s LetGo, which was enlarged by Naspers in subsequent funding rounds. It is unclear exactly how many shares Naspers holds in LetGo today, and how many Oxenford still holds.

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Brian Blum

Brian Blum covers the U.S., Canada and Israel for Classified Intelligence Report, and contributes to our special reports and research projects. Originally from San Francisco and now based in Jerusalem, he has been with the AIM Group since 2004. He is the president of Blum Interactive Media, specializing in writing and multimedia content development for online, print, video and audio. His clients include newspapers, universities and non-profits. He is currently working on a book about the billion-dollar bankruptcy of a once high-flying Israeli startup.