Whatnot sees the success of the live broadcast | Los Angeles Business Journal

Whatnot started out in collectibles, but branched out into many other retail categories.

When Roger Caneda discovered Whatnot Inc. in January, selling collectible cards was just a side business.

But within 10 months, his in-app channel, World Card Traders, had become more than a hobby. He turned his live streaming channel into a full-time business with “six figures a month” in income, five employees and the stability to quit his day job in consulting, he said.


“It’s crazy,” Caneda said. “I quit my consulting practice… because this business exploded so quickly. And there’s no doubt Whatnot has to do with it.
Caneda isn’t the only user to win gold on Whatnot – the platform has attracted thousands of users in less than two years. Founded in 2019, the Marina del Rey-based company operates an app-based live shopping marketplace through which users buy and sell novelty and collectible items, such as Funko Pop figures, comics and Pokémon cards.


The company has seen demand and use of the app increase during the pandemic, raising more than $ 200 million in funding over the past eight months and reaching a valuation of over $ 1 billion.


“We want to create the best online marketplace for collectors and enthusiasts,” said Grant LaFontaine, co-founder and CEO of Whatnot.


Exceed QVC

LaFontaine calls Whatnot “Twitch meets eBay” in reference to the app’s live streaming and auction capabilities. The app has around 15 categories, with the most popular being sports cards. Whatnot makes money by taking an 8% fee on every transaction.

For shoppers, the platform acts as an “Instagram feed” for live product broadcasts, LaFontaine said, allowing them to easily browse channels and offers. The platform allows sellers to give detailed information about the products they offer.


LaFontaine said that he and his co-founder, Logan Head, who is the company’s chief technology officer, launched the app because there weren’t many modern online shopping options for them. collectors outside of eBay Inc. The duo previously sold limited-edition shoes as a side project, giving them insight into the needs of resellers.


LaFontaine and Head launched the company in December 2019 and in 2020 joined Y Combinator, a Mountain View-based startup accelerator tasked with helping launch Airbnb Inc., DoorDash Inc. and Stripe Inc.


Because the company started out with users exclusively selling Funko Pop figures, Whatnot initially had difficulty raising capital, Head said. Expansion into additional categories has contributed to its growth.


“The investors we met didn’t necessarily believe in space,” he said. “Some didn’t think we could get out of Funko Pops, but we knew we could.”


Today, the company has gained hundreds of thousands of buyers and thousands of sellers without spending any money on marketing, LaFontaine said.


“Logan (Head) designed the product to make it truly shareable so people can share it for natural growth,” said LaFontaine. “Our community really loved it, both the sellers and the buyers, so with word of mouth it naturally blossomed.”


According to San Francisco-based market intelligence firm Sensor Tower Inc., Whatnot was the most downloaded live commerce app in the United States between January and September, beating Hollywood-based Commerce Media Holdings, better known as the name of NTWRK, and West Chester, Pennsylvania. based on QVC Mobile Shopping, the first two of the previous year for the same period.


Whatnot saw 21 times more installs during that nine-month period in 2021 than in 2020, reaching 580,000 in 2021 from 27,000 the previous year.


“It’s definitely gaining momentum, and it’s top of the other leaders in this sub-category of mobile shopping,” said Randy Nelson, head of mobile information at Sensor Tower.


Compared with the rapid growth of the industry in China, live commerce in the United States in all app stores is still a small market. But the U.S. live-streaming industry is expected to grow to $ 11 billion by the end of 2021 and grow to $ 25 billion by 2023, according to New York-based research and consulting firm Coresight Research.

By comparison, China’s direct-to-home retail industry was estimated at $ 171 billion in 2020 and is expected to grow to $ 423 billion by 2022, according to New York-based consulting firm McKinsey & Co.

Nelson said it was only a matter of time before the trend really took hold in the United States, in the same way that the TikTok video-sharing app gained popularity in the West after it took hold. in China.


“This particular space is developing very quickly in China and throughout the region (Asia-Pacific),” Nelson said. “And as we’ve seen with other social engagement trends in mobile, live and interactive video will eventually find its way into the United States.”


Investor interest

Whatnot’s rapidly growing platform has caught the attention of investors.
Since March, the company has raised $ 220 million in three different funding rounds. Its latest round, a $ 150 million Series C, tripled its total funding and gave the company a valuation of $ 1.5 billion.


The company’s investor syndicate includes Silicon Valley venture capitalists such as Andreessen Horowitz; Continuity of combiner Y; and CapitalG, the venture capital arm of Alphabet Inc.


Funding skyrocketed Whatnot in the LA Unicorn Club, placing him in the ranks of ServiceTitan Inc .; Scopely Inc .; and Liminex Inc., known as GoGuardian, all of which have received valuations of over $ 1 billion.


“Whatnot’s merger of entertainment and commerce has created an incredible growth driver that accelerates growth on both sides of their market,” said Laela Sturdy, General Partner of CapitalG, in a statement. “Buyers spend hours each week participating in the app’s content and community, while sellers get stronger monetization than available on other channels. “


Whatnot plans to double its team over the next 16 months from 75 to 150, recruiting for positions in products, engineering and operations, LaFontaine said. The company also plans to invest in marketing by setting up a content studio.


The investment will support the company’s expansion into categories such as vintage and luxury resale fashion such as sneakers, watches and handbags, as well as non-fungible tokens, LaFontaine said. But these categories are far from the end for Whatnot.


“There are probably thousands of categories that we would love to fall into,” said LaFontaine. “I don’t think fashion and collectibles are the end of it.”

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