Retail

Letgo: The Smarter Used Goods Marketplace

eBay Challenger Letgo Raises $175M

For longtime users, there is something almost refreshingly low-tech and unfussy about Craigslist. While the rest of the internet is redesigning itself with slicker interfaces and pretty images, Craigslist remains committed to its mid-1990s aesthetic and complexities of browsing its annals. Pitched as the internet’s garage sale, Craigslist has managed to create the experience of digitally picking through a garage sale on the side of road — and for that accomplishment, it should be praised.

But if one is trying to easily find something, it might be best to hold the Craigslit applause. It is not at all easy to search Craigslist. One is more or less at the mercy of the categorization system — and spelling idiosyncrasies — of the individuals doing the posting. That Craigslist would draw competitors and potential disrupters is unsurprising; that it has been so hard to supplant despite its myriad issues is mildly attention drawing.

Craigslist has the merit of being free for buyers and sellers. When person-to-person mobile classifieds app letgo entered the market, it had to minimally meet Craigslist’s big drawing potential and charge for use.

“The kinds of metrics we care about are activity,” said Alex Oxenford, founder of letgo.

Since its launch, the service has generated more than $20 billion in gross merchandise value sold on the platform, a big increase from the $25 million the firm saw in its first few months. All in, the app has been downloaded 45 million times and now claims 20 million active users.

The Magic 

As noted, letgo is easier to use than Craigslist. It was also designed to be significantly safer by taking some of the “blind date” elements out of the transaction. Users — buyers and sellers — create profiles on the site which can be connected with and “verified” by social accounts like Facebook and Google. Users are reviewed by the people who interact with them. Those reviews, as well as data on past transactions — like what else they are selling or have sold in the past — are all visible to the rest of the letgo network.

The app also comes preloaded with a chat feature so users can discuss the sale. The default price for all goods on the marketplace is “negotiable” as opposed to referring out through email or telephone.

Greater than the marketplace’s attempts to create transparency so buyers and sellers have no reason to fear fellow users, the app uses artificial intelligence to make the process of selling goods in the marketplace easier and more accessible. The app’s proprietary software allows users to upload photos with a tap. The app handles the categorizing work using image recognition and geolocation to pinpoint the seller’s location.

“If you open our app and go to post something, you’ll see a red button asking if you want to sell something,” said Oxenford. “Open your camera and take a picture of whatever it is you want to post. You don’t need to write a title or price or anything… If you want to include details, click on ‘add details.’”

What’s Next 

Though the bulk of its business is in the U.S., letgo is available in Europe and Canada. After a $175 million financing round to kickoff 2017 — bringing the firm’s total raised to $325 million to date — it’s valuation is either at or flirting with unicorn territory.

But letgo also faces a very competitive market space, and from more than the surprisingly resilient (but not-too-competitive) Craigslist. It faces off with the recently more engaged Facebook marketplace in the U.S., and on the global level with eBay-operated Kijiji — a service that flopped in the U.S. but has been successful in 32 other markets.

letgo claims it has smarter software and a much better method for taking the friction out of customers lives, and that makes it competitive. With 20 million active monthly users in just over a year since its launch, letgo is certainly becoming serious about the competition.

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