The largest online consignment and thrift store thredUP raises $175 million. Half of its engineers are from Ukraine. Details of the company are in the article
The largest American online consignment and thrift store thredUP raised $175 million in funding. The leading investors were Park West Asset Management and Irving Investors with Goldman Sachs Investment Partners, Upfront Ventures, Highland Capital Partners and Redpoint Ventures also participating in the round. The total amount of invested capital in thredUP after the deal amounted to $300 million.
The startup will spend the funds raised to further develop its platform with the help of which thredUP plans to conquer the market of used luxury clothing (estimated at $50 billion). But few people know that almost half of thredUP’s engineering team is based in Ukraine.
Director of the company’s Ukrainian office, Anton Naumenko, told AIN.UA about how the Californian company put together a team in Ukraine, how many people are currently working on the platform, and what the Ukrainian office of thredUP looks like.
What is thredUP
thredUP was founded in 2009 by three fellow students at Harvard Business School: James Reinhart, Oliver Lubin, and Chris Homer. Initially, it was a platform for exchanging men’s shirts based on the P2P model – that is, the platform did not intervene in the process, providing only a showcase and means communication. For 10 years, the startup survived several pivots, becoming the largest marketplace for the resale of used women’s and children’s clothing.
The P2P model was switched to a managed marketplace model: now people only send clothes to thredUP (delivery is paid for by the company), and the marketplace takes care of the rest.
Marketplace experts check the shipments, sort things – the best items are selected for placement, and what is not suitable for sale on the site is sent for secondary sale. So clothes can even reach the Ukrainian second-hand.
Sorted items are photographed and posted on thredUP.com.
The profit from each sale is divided between the site and the supplier depending on the value of the item. For example, if a T-shirt is sold for $13, the supplier will receive no more than 10% – the rest will go to cover the costs of thredUP. But from the sale of an evening dress or branded handbag, the value of which exceeds $100, about 80% of the amount will be returned to the supplier.
thredUP in numbers
- You can buy on the website clothes of 35,000 brands for 10% of the price.
- thredUP processes about 100,000 items daily – one per second.
- In an hour about 1,000 new products appear on the site.
- Today, the site offers 3 million unique items.
- During its existence thredUP evaluated, photographed and resold 60 million unique wardrobe items from all over America.
- The company is represented in large offline networks – by September 2019 the number of locations will increase to 100. Among them are Macy’s, JCPenney, Stage Stores, and others.
- thredUP.com website is available in 44 countries (Ukraine is not in the list).
What Ukraine has to do with this
The thredUP has its head office in California (the company is currently moving from San Francisco to Auckland), but many employees of the company work remotely while living in other cities and even countries. At the same time, the company did not plan to open remote offices and did not consider Ukraine as its potential R&D base.
It all started with difficulties in hiring programmers – many technology companies in the Valley suffer from a lack of qualified personnel. To fill technical vacancies thredUP decided to seek out remote talents. Several developers were hired through the toptal.com platform (freelance exchange with strict selection parameters), and it so happened that they were all from Ukraine.
By October 2017, the company already had 15 people working for it from Ukraine on an ongoing basis. Then the startup’s management decided to put together a team under the same roof.
A few words on the growth of the Ukrainian team of thredUP
Anton Naumenko became the leader of the team in Ukraine in April 2018. At that time, thredUP already had 16 people working here. The company hired a recruiter in the summer of 2018. Since then, the Ukrainian team has at least 5 vacancies open at a time.
“We are in a constant process of finding the most talented engineers,” says Anton.
Over the year, the team has doubled – to 34 members – and today the team makes up almost half the entire engineering staff of thredUP.
Recently, Ukrainian engineers moved to a new office and occupied an entire floor of the Horizon Park 2 business center. We show how it looks exclusively at AIN.UA:
What are Ukrainian engineers working on
There is no division of responsibilities – the Ukrainian office is doing all the same things as its American colleagues. All specializations of all engineering teams are presented: software developers, Data Scientists, DevOps, Data engineers, etc.
What is the model of the Ukrainian office of thredUP
The R&D center is organized based on an outsourcing model.
“The legal framework for daily operations is provided by Alcor, and it deals with all financial issues. Our engineers, like most IT specialists, are FOPs [Individual entrepreneurs]and contract with the group of companies Alcor,” Anton Naumenko explained to AIN.UA.
Peculiarities of work of the Ukrainian office of thredUP
The time difference with the head office is 10 hours. Engineers need to adjust their work schedule to have time to communicate with their colleagues in California in the evening.
“In addition, many roles involve user and employee support at our distribution centers. Sometimes you need to switch to Californian time in order to effectively complete a critical project,” says Naumenko.
If an engineer works in our business time, then you need to be much more organized. For example, if you just forgot to ask your colleagues something and you cannot finish the job without it, you will waste an entire day.”
Peculiarities of hiring to the Ukrainian team of thredUP
The vast majority of Ukrainian engineers come to the company from outsourcing. This leaves a certain imprint.
“Guys who have worked in outsourcing for a long time focus only on the technical side of problem solving. This leads to the fact that it’s difficult and sometimes impossible for them to switch to the kind of work that requires them to be guided by a business result,” Anton explains.
“It doesn’t matter how much time you spent at work, or how many lines of code you wrote – what matters is how much money you earned or saved for the business, for our customers and suppliers,” says Naumenko.
According to him, most often applicants do not undergo technical interviews, but there have also been cases when some engineers did not pass the probationary period. The reason was the discrepancy with the cultural values of the company.
“We often refuse applicants if we see that they are motivated only by career growth, only by the financial side or new technologies. The practicality of the engineering approach to developing thredUP products is very important for us. We provide top compensation in the market, and all engineers are given stock options – which respectively puts our selection bar high,” says Naumenko.
Relocation to the U.S.
The company relocates the most talented engineers to the United States. This process is cumbersome and there are no guarantees, as visas of the required type H1B are distributed as a lottery. thredUP annually submits applications for remote engineers from Ukraine, India and other countries, but only those who win visa get a chance to move.
“At the same time, I can’t say that we have a line of people waiting to relocate, this year only one of 34 engineers applied for a visa,” says Anton.