DTC’s Daily Digest brings you the latest news on the world’s fastest growing direct-to-consumer brands. In today’s edition: Student marketplace Paperclip seeks funding; ThredUp partners with JCPenny and Macy’s; Better.com brings in more funding.
Student marketplace Paperclip seeks funding
The funds are to help Paperclip deepen its presence, with the business looking to onboard over 70% of UK universities before the end of 2020. The longer-term plan is to take on the likes of Shpock, eBay, Gumtree and Craigslist by providing a secondhand marketplace that competes on fees, accessibility, and security.
While Paperclip will be offering marketplaces to universities for free as part of a minimum-friction land grab, they will aim to derive income from advertising partnerships and marketplace fees with a revenue share for each students’ union.
The funds will allow the core team to continue functioning, along with ability to bring onboard interns for 6-12 months to help with sales and engagement. They will also help drive the marketing/engagement budget for the 2019/2020 academic year, ensuring that each new marketplace onboarded receives the appropriate level of engagement to grow organically. Once 70% of UK universities are onboarded, some attention could be turned to the US; there are 109 registered universities in the UK but over 2,600 accredited universities in the United States.
ThredUp partners with JCPenny and Macy’s
In separate announcements this week, JCPenney and Macy’s each said they would establish sections in a select number of stores to offer women’s handbags and clothing from ThredUp. Macy’s said its pilot program would involve 40 stores, while JCPenney will establish ThredUp departments in 30 of its stores.
JCPenney’s chief executive, Michelle Wlazlo said Thred Up can help the company reach a new type of customer. “With the rise of online resale markets, there’s no doubt that demand for great value on quality brands is at an all-time high,” she said. “While there are more secondhand shoppers than ever before, we’ll continue to test and evaluate how this resonates with customers.”
JCPenney made the announcement about ThredUp at the same time it delivered disappointing second-quarter results. The business reported a loss of USD$48m and said that sales fell 9.2% from the same period a year ago.
Better.com brings in more funding
Better.com says it has “grown” at least three times in the last year, and by a multiple of ten over the last three years. The company currently funds USD$375m (£310m) in mortgages a month.
In the second quarter alone, Better.com says it funded USD$1bn (£830m) worth of loans, which was more than it executed in all of 2016 and 2017 combined. The new result puts the company on track to lend over USD$4bn (£3.3bn)in 2019 to over 20,000 customers, it said. Since its product launched in 2016, Better.com says it has thus far funded more than USD$4bn (£3.3bn) in loans.
With Better, homebuyers (or those refinancing) can upload and digitally sign documents to receive loan estimates in seconds and a pre-approval within minutes. The company claims it is able to “close” a typical mortgage 50% faster than the industry average.
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