The Bellevue buy-sell company, founded in 2011, is valued at more than $1 billion, making it a rare tech “unicorn” in the Puget Sound area.
Mobile marketplace OfferUp cemented its status as one of the region’s largest tech startups Thursday by snaring another massive round of funding.
The Bellevue buy-sell company raised $119 million from private equity firm Warburg Pincus and existing investors, bringing its total amount raised to $210 million over its five-year life.
OfferUp CEO Nick Huzar also confirmed that the company was valued at more than $1 billion under the deal, making it a so-called “unicorn,” something rare in the Puget Sound region. Tech unicorns have come under scrutiny lately over concerns that their valuations are overblown. But that doesn’t bother Huzar.
“Valuation is not really a big deal for us. It’s more about where we want to go,” he said. “It’s a testimonial to the kind of company we’re building.”
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The Wall Street Journal suggested in a report this summer that OfferUp was raising money at a $1.2 billion valuation.
OfferUp mobile apps let people search for items for sale in their immediate area. The company is taking on Craigslist, the longtime leader for selling items online in local areas. OfferUp focuses on its mobile technology, which makes it easy to quickly post photos of items up for sale in a Pinterest-like presentation.
The startup, founded in 2011 by Huzar and Arean van Veelen, raised its previous huge round of funding — $73 million — just 10 months ago. Thursday’s financing will help the company hire and explore launching in countries outside the U.S.
“We’ve been growing so fast over the years, the biggest challenge has always been keeping up with our growth,” Huzar said.
OfferUp is also focusing on building trust among its users — a safety component that has occasionally plagued companies that encourage users who meet online to interact in real life. The startup offers a feature that allows users to scan their ID and be verified by the site, giving them a bit more credibility.
When OfferUp announced its $73 million round, it wasn’t yet making revenue from the site. Now, Huzar said the company is experimenting with different ways to make money but has not settled on a model.
OfferUp faces steep competition from the entrenched Craigslist, as well as fellow newcomers such as New York-based Letgo.
Letgo announced last month that its app had been downloaded 30 million times and it expects the marketplace will sell $13.2 billion in goods this year. OfferUp reports 29 million downloads and expects to hit $14 billion in transactions this year.
Huzar said he’s not surprised competitors are jumping into the industry, but that the latest funding proves OfferUp is the “dominant” player.
New investor Warburg Pincus invests in similar international marketplaces around the world, managing director Justin Sadrian said, adding OfferUp is growing so quickly it would be hard not to take notice.
“They’re not just trying to drag a Craigslist experience onto a mobile device, but trying to rethink the whole process,” he said.
OfferUp has grown from about 40 employees a year ago to more than 100 now.