Craigslist has held dominance over the online classifieds space for over two decades. Now, several startups are vying to take over. Letgo and OfferUp are increasing in popularity for users that want to sell their unwanted items through their smartphones. Despite the fact that neither startup charges for their services, investors are already taking part.
In fact, OfferUp is set to raise $120 million in funding led by private-equity firm, Warburg Pincus. OfferUp’s valuation was $70 million in 2014. Today, it is at around $1.2 billion. Although, the deal with Warburg Pincus is not yet final. On the other hand, Letgo just received $100 million in new financing and is airing a major TV ad campaign.
Letgo’s main financial backer is South African media giant, Naspers Ltd. Not one to stay away from rising trends, Facebook Inc. is testing its own version of a local classifieds service. It doesn’t hurt that its social network has 226 million users in the U.S. and Canada. According to comScore, Craigslist has around 70 million U.S. visitors each month. Yet, it’s website hasn’t changed much since 1995.
Both OfferUp, Letgo and other similar companies, are designed specifically for mobile. All a seller needs to do is post an ad after taking photos with their smartphone camera. Buyers can then reach sellers immediately with a text as opposed to the Craigslist email system. Letgo has raised over $200 million. As of may, OfferUp had $60 million of cash on hand with 12.6 million users. It looks like the classifieds space is in the process of a disruption.