It’s hard to give up that old wardrobe, teddy bear, bass guitar…you name it. But make the decision and letgo helps people, well, let go. CEO Alec Oxenford tells PYMNTS how AI – specifically auto recognition tech – helps match buyers and sellers, and gives a peek at how it might spend some of the $500 million in funding it just raised.
What’s old is new again, kind of — or how about secondhand goods and first-rate funding? Funding of $500 million is affirmation, it seems, of a marketplace that underpins the buying and selling of used goods.
Online firm letgo, which brings sellers who want to unload secondhand items to interested buyers, said this month that it closed a $500 million funding round from Naspers, a South Africa-based internet and media firm. Of that $500 million tally, $150 million was transferred earlier this summer.
Naspers joins a slew of other investors, such as Insight Venture Partners and Accel. As reported late last year, a previous funding round of $100 million valued the company at $1 billion. In the past, Naspers has taken stakes in firms such as Flipkart and Tencent.
It’s a vote of confidence — or 500 million votes of confidence — in an old idea turbo-powered by new tech. For it is technology, specifically artificial intelligence (AI) and machine learning (ML), that gives a twist to an online arena dotted with such names as Craigslist and eBay, and any number of firms that promote and create local meetups where one man’s junk is another man’s treasure. If only they could find one another…
In an interview with PYMNTS, letgo Co-founder Alec Oxenford gave an overview of how technology is removing the friction tied to the age-old process of getting rid of what one doesn’t need … and getting paid in the process. Detailing the inspiration behind app-based letgo, the CEO said the overarching theme is that it should be as painless to resell something as it is (and was) to buy it in the first place.
“Buying something secondhand is also extraordinarily ‘green,’ since there’s no environmental footprint as there is with new and even recycled goods,” he told PYMNTS. “So, we’re big believers in making secondhand eCommerce a bigger part of the sharing economy.”
As for the technology itself, he said that the process becomes streamlined for both buyers and sellers in an environment where the company uses technology that spans real-time image recognition and other AI. It is the AI, though, that offers up titles and categories — and prices, too. Some of the legwork one needs to do to make sure the right set of eyes finds the right prize … that legwork is automated. Users are also able to edit details tied to their listings. It’s known as auto-recognition tech.
In detailing some of the steps that lead to, and are part of, interactions between buyers and sellers, Oxenford said consumers can browse photos of what’s for sale nearby or search for something specific. When something spurs a would-be buyers’ interest, he said, they simply message the seller in the app, agree on a price and meet somewhere — like a coffee shop — to pick it up.
“We’ve also made it easy to check out a user’s profile, ratings and reviews to see who you’re chatting with and what others have said about them,” he added.
Of the AI efforts, Oxenford said, “The technology helps us personalize the user experience and moderate our marketplace, which is a huge advantage at our scale. We also have chat built into the app, so users don’t have to deal with the slow back-and-forth of email.”
The ease of use, he said, has helped spur growth over the past three years, which has seen letgo pass a few milestones, including 100 million downloads and 400 million listings. The company also said that the number of monthly listers on its marketplace has grown by 65 percent since the beginning of the year.
The model is one that has picked up traction, clearly, and which holds attraction. Consider the fact that, last month, The RealReal — a firm focused on authenticated luxury consignment — closed $115 million in Series G financing. In addition, as detailed by PYMNTS in May, secondhand sports gear has made the leap online through companies such as SidelineSwap. The phenomenon is far-flung: In Japan, Mercari and its public listings show the appeal of the thrift culture via peer-to-peer (P2P) marketplace, with an app that has been downloaded more than 70 million times.
Getting Reveals On Reveal
Last month, letgo debuted its Reveal technology, which uses the aforementioned image recognition and AI to display an item’s estimated value when a user points at the item with their smartphone. Reveal also allows for video listings. Both features are available to letgo users in the United States.
Reveal, the company said, lets those same users price their items competitively and gauge demand. The evolution of Reveal has come as Oxenford stated that mobile has allowed the firm to build new features that mix both technology and design.
Looking Ahead
When asked about how the funding will be used over the near and longer term, Oxenford stated, “I don’t want to reveal too much just yet. But we’re focused on evolving our app, like we did this summer with the additions of Reveal and video listings. We’re also expanding our team and continuing to test monetization strategies.”
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