November 14, 2017 –
I first met Manish Chandra over a decade ago, as he was raising capital for his company Kaboodle, a social commerce platform in the era before social networks. He was then and is now, focused, smart and 100% tuned to building products that reflect consumer needs. I knew I wanted to be his partner, but the stars did not align for us to invest in Kaboodle, which Manish went on to build into an innovative shopping platform, which was acquired by Hearst Corporation. We stayed in touch and when it was clear that he was ready for his next act in 2010, I was determined to jump on for the ride.
The truth about being a people-first investor is that you have to trust the entrepreneur with a big idea and believe that they will grow it into an iconic company. This does not mean that you ignore other signals like market size or unique value propositions, but so often, big companies result from the grit of the entrepreneur and serendipity, that you have to be a believer from before day one. After several months of conversation, when Manish told me in late 2010 that he wanted to build a big online fashion platform which would mirror the scope and impact of an LVMH in the physical world, I did not know how he would get there, but it was easy to believe in his vision and conviction. Mayfield led a Series A round in February 2011, and we were off to the runway.
Today, Poshmark announced their Series D, an $87.5 million round led by Temasek, Singapore’s well respected sovereign fund with $275 billion of portfolio value from investments in Airbnb, Ancestry.com, Classpass, Dell Technologies, Jasper, Verily Life Sciences and Virtu Financial. We are significant investors in the financing and are excited about this milestone for Manish and his team as they lead the future of social commerce.
As I think back on our seven-year journey with Poshmark, here are some insights, which might serve as valuable pointers to other early-stage founders.
Tap into your network early
Manish had decided to focus his new company on fashion and was looking for a co-founder who was well versed in the business of fashion, and preferably from the East Coast. We were able to introduce him to his co-founder Tracy Sun, and this was even prior to us investing in the company. Tracy continues to play a key role at Poshmark and is seen as a leader in the industry, with her latest recognition being named to the BoF 500 list. We have subsequently introduced him to several key executives including in HR and corporate development.
Above all else, a venture capitalist needs to provide capital
This is a direct quote from Manish, and whether it was leading their Series A, helping bring partners to the table for their Series B, and C, and participating in a big way in their latest financing, Mayfield has been a constant financial supporter of the company. For Manish and Poshmark, the Series C round in 2015 posed a tough juncture, as all the metrics that later-stage investors look for were not yet in place. We were able to get investors who had faith in the model, and our confidence to keep taking (calculated) risks, helped get the team closer to realizing its vision.
Radical candor between entrepreneur and investor is key
Poshmark had grown steadily in the first half of 2013, but their systems could not keep up. Manish recommended that they slow down growth, until they scaled up their infrastructure. In the world of scale at all costs, it can be hard for an investor to support a planned slowdown, but we were absolutely behind it and it turned out to be the right strategy for the company, which has since experienced escape velocity growth along with the systems to support it.
Listening is just as important as talking for a board member
Manish jokes about how we are the quietest members at board meetings. As a former entrepreneur, I strongly believe that world-class entrepreneurs will figure out how to climb the hill they targeted or find a new one to climb. For Poshmark, the serendipity of the iPhone and later Instagram along with the flywheel of seller stylists, has resulted in it becoming the largest social fashion marketplace. Manish and I speak/text several times a week, and I am accessible to him, but often, what he needs is a sounding board for efficient thinking, reinforced focus, and the opportunity to plan ahead for the next stage of the company.
Successful investors do not always have to be domain experts
People who know me say I wear Polo shirts with style, but I am no fashionista. Yet, Poshmark has grown into the go-to marketplace to buy and sell fashion, with impressive social and marketplace metrics including:
- Facebook-level engagement from millions of users who open the app 7-9 times a day and spend 25 minutes in it daily;
- 3 million seller stylists who share 8 million items daily with 75% of shoppers being repeat buyers from the same Poshmark boutique;
- Over $4 million worth of inventory uploaded to the platform every day, comprising a total of over 25 million items for sale from over 5000 brands.
Poshmark has kept the marketplace momentum going while expanding into new categories like men’s fashion. They also continue to deliver on product innovation such as through their announcement of social styling with Amazon Alexa today.
Manish and I have been able to build our trusted relationship based on my general investing experience, not because I am a domain expert in fashion. At Mayfield, we strongly believe in mentor capital, not just venture capital, and are people-first investors with diverse companies in our portfolio including companies such as a converged data platform in MapR, a digital health platform in Brighter, a new systems company for the data era in Fungible, and the premier ride-sharing network in Lyft. So for those entrepreneurs with bold ideas, regardless of domain, know that this engineer-turned-entrepreneur-turned-investor wants to hear from you.