What changed in this filing

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Item 1. Business

2023-03-07 compared with 2022-03-22 · 39 added, 40 removed, 84 unchanged (48% of the section changed)

thredUP is one of the world’s largest online resale platforms for women’s and kids’ apparel, shoes and accessories.

thredUP operates one of the world’s largest online resale platforms for apparel, shoes and accessories.

Our mission is to inspire a new generation of consumers to think secondhand first.

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Our custom-built operating platform consists of distributed processing infrastructure, proprietary software and systems and data science expertise.

This platform is powering the rapidly emerging resale economy, one of the fastest growing sectors in retail, according to a GlobalData market survey conducted in April 2021.

This platform is powering the rapidly emerging resale economy, one of the fastest growing sectors in retail, according to a GlobalData market survey conducted in February 2022.

thredUP’s proprietary operating platform is the foundation for our managed marketplace, where we have bridged online and offline technology to make the buying and selling of tens of millions of unique items easy and fun.

The marketplace we have built enables buyers to browse and purchase resale items for primarily women’s and kids’ apparel, shoes and accessories across a wide range of price points.

Buyers love shopping value, premium and luxury brands all in one place, at up to 90% off estimated retail price.

Our marketplaces enable buyers to browse and purchase resale items for primarily women’s and kids’ apparel, shoes and accessories across a wide range of price points.

Buyers love shopping value, premium and luxury brands all in one place, at up to 90% off estimated retail prices.

Sellers love thredUP because we make it easy to clean out their closets and unlock value for themselves or for the charity of their choice while doing good for the planet.

thredUP’s sellers order a Clean Out Kit, fill it and return it to us using our prepaid label.

We take it from there and do the work to make those items available for resale.

In 2018, based on our success with consumers directly, we extended our platform to enable brands and retailers to participate in the resale economy.

A number of the world’s leading brands and retailers are already taking advantage of our Resale-as-a-Service (“RaaS”) offering, which allows them to conveniently offer a scalable closet clean out service and/or resale shop to their customers.

We take it from there and do the work to make those accepted items available for resale.

In addition to our core marketplace, some of the world’s leading brands and retailers are already taking advantage of our Resale-as-a-Service (“RaaS”) offering, which allows them to conveniently offer a scalable closet clean out service and/or resale shop to their customers.

We believe RaaS will accelerate the growth of this emerging category and form the backbone of the modern resale experience domestically and internationally.

In October 2021, we closed the acquisition of Remix Global AD (“Remix”), a fashion resale company headquartered in Sofia, Bulgaria, which further expands our reach to the European customer.

In 2021, we acquired Remix Global AD (“Remix”), a fashion resale company headquartered in Sofia, Bulgaria, which further expands our reach to the European customer.

With this acquisition, we added a complementary operational infrastructure and an experienced management team to enable our expansion into Europe.

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• Distributed Processing Infrastructure.

Our infrastructure is purpose-built for “single SKU” logistics, meaning that every item processed is unique, came from or belongs to an individual seller and is individually tracked using its own stock keeping unit (“SKU”).

We believe logistics and infrastructure have never been executed at our scale in the online resale market.

Our infrastructure is purpose-built for “single SKU” logistics, meaning that virtually every item processed is unique, came from or belongs to an individual seller and is individually tracked using its own stock keeping unit (“SKU”).

As of December 31, 2022, we operated distribution centers that could collectively hold more than 7.3 million items in locations across the United States and Europe.

Our operations are highly scalable, and we have the ability to process more than 100,000 unique SKUs per day across our existing distribution footprint.

Our operations are highly scalable, and we have the ability to process more than 100,000 unique SKUs per day across our existing distribution center footprint.

We drive continuous operational efficiency through proprietary technology and ongoing automation of our infrastructure.

Our existing United States based distribution centers are located in Arizona, Georgia and Pennsylvania.

In 2022, we anticipate opening another distribution center in Texas and have opened two smaller processing centers in Texas and Tennessee.

Our existing United States-based distribution centers are located in Arizona, Georgia, Pennsylvania, and Texas.

By locating our facilities in strategic locations across the country, we can be closer to our buyers and sellers, which allows us to reduce shipping times in transit, and lower our inbound and outbound shipping costs.

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We generate revenue primarily from items that are sold to buyers on our websites and mobile app and from integration and service fees charged in connection with our RaaS offerings.

In 2019, we shifted to primarily consignment sales.

Our revenue is comprised of consignment sales and direct product sales.

With consignment sales, we recognize revenue net of seller payouts, and cost of revenue includes outbound shipping, outbound labor and packaging costs.

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This suite of offerings is called “Resale 360” and enables our RaaS clients to drive incremental revenue and access new customers while promoting a circular business model.

As of December 31, 2021, we worked with 28 RaaS clients, including Adidas, Crocs, GAP, Madewell, Reformation and Walmart.

As of December 31, 2022, we worked with 42 RaaS clients, including GAP, Hot Topic, Madewell, Reformation, Tommy Hilfiger, Torrid, and Walmart.

We have methodically scaled operating capacity and revenue, while increasing gross profit and improving our operating performance.

• As of December 31, 2021, we had 1.69 million Active Buyers, up 36% over December 31, 2020.

• In the year ended December 31, 2021, our buyers placed 5.3 million Orders, up 34% over December 31, 2020.

Human Capital Resources

As of December 31, 2021, we had 2,894 employees and professional contractors, including 2,496 distribution center employees.

To our knowledge, none of our employees is represented by a labor union or covered by a collective bargaining agreement.

We have not experienced any work stoppages and we consider our relations with our employees to be good.

We supplement our workforce with contractors and consultants in the United States and internationally, including Ukrainian information technology, or IT, specialists.

These Ukrainian IT specialists, who provide services on our behalf, are registered as “private entrepreneurs” with the tax authorities of Ukraine and operate as independent contractors.

While we do not anticipate a reduction in force due to conflict in Ukraine, we anticipate that at least some of our Ukrainian IT specialists may be unable to work while the conflict is unresolved.

Our human capital resources objective is to cultivate a high-performing team by recruiting, retaining, incentivizing and integrating our existing and new employees and professional contractors.

Our culture is underpinned by our core values, including an unwavering commitment to learning, development, inclusion, diversity, equity and belonging.

The core objective of our compensation program is to provide a package that will attract, motivate and reward exceptional employees who must operate in a highly competitive and technologically challenging environment.

Our Competitors

• During the year ended December 31, 2022, our buyers placed 6.5 million Orders, up 22% as compared to the same period in 2021.

Although we have built a scaled and highly differentiated platform and managed marketplace, we face intense competition.

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We rely on a combination of patents, trademarks, copyrights, trade secrets, license agreements, confidentiality procedures, non-disclosure agreements, employee disclosure and invention assignment agreements, as well as other legal and contractual rights, to establish and protect our proprietary rights.

As of December 31, 2021, we had six issued patents in the United States, four of which expire in 2035 and two of which expire in 2037.

We have patents issued in the United States.

These patents are intended to protect our proprietary inventions relevant to our business.

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In addition, our proprietary algorithm technologies, other than those incorporated into a patent application, are protected by trade secret laws.

As of December 31, 2021, we have a total of 19 registered trademarks in the United States and six registered trademarks in non-United States jurisdictions.

We also hold trademarks in the United States as well as in other jurisdictions.

“THREDUP” and “Think Secondhand First” are our registered trademarks in the United States.

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We also have registered domain names for websites that we use in our business, such as www.thredup.com and other variations.

Government Regulation

We are subject to a variety of United States federal and state laws that affect companies conducting business on the Internet and in the retail industry, many of which are still evolving and could be interpreted in ways that could harm our business.

We are subject to a variety of United States federal and state laws as well as international laws that affect companies conducting business on the Internet and in the retail industry, many of which are still evolving and could be interpreted in ways that could harm our business.

These laws and regulations include laws governing the processing of payments, consumer protection and other laws regarding unfair and deceptive trade practices.

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We are also subject to environmental laws, rules and regulations.

Similarly, apparel, shoes and accessories sold by us are also subject to import regulations in the United States

concerning the use of wildlife products for commercial and non-commercial trade, including the United States Fish and Wildlife Service.

Similarly, apparel, shoes and accessories sold by us are also subject to import regulations in the United States concerning the use of wildlife products for commercial and non-commercial trade, including the United States Fish and Wildlife Service.

We do not estimate any significant capital expenditures for environmental control matters either in the current fiscal year or in the near future.

Corporate Information

We were incorporated in 2009 under the name ThredUp Inc.

as a Delaware corporation.

Our principal executive offices are located at 969 Broadway, Suite 200, Oakland, CA 94607, and our telephone number is (415) 402-5202.

Our website address is www.thredup.com.

Information contained on, or that can be accessed through, our website does not constitute part of this Annual Report on Form 10-K.

Human Capital Resources

As of December 31, 2022, we had 2,416 employees and professional contractors, including 2,011 distribution center employees.

To our knowledge, none of our employees is represented by a labor union or covered by a collective bargaining agreement.

We have not experienced any work stoppages and we consider our relations with our employees to be good.

We supplement our workforce with contractors and consultants in the United States and internationally, including Ukrainian information technology, or IT, specialists.

These Ukrainian IT specialists, who provide services on our behalf, are registered as “private entrepreneurs” with the tax authorities of Ukraine and operate as independent contractors.

While we do not anticipate a reduction in force due to conflict in Ukraine, we anticipate that at least some of our Ukrainian IT specialists may be unable to work while the conflict is unresolved.

Our human capital resources objective is to cultivate a high-performing team by recruiting, retaining, incentivizing and integrating our existing and new employees and professional contractors.

Our culture is underpinned by our core values, including an unwavering commitment to learning, development, inclusion, diversity, equity and belonging.

We believe our people are our greatest asset and are reimagining our employee experience to reflect that philosophy.

We work diligently to attract the best talent from a diverse range of sources in order to meet the current and future demands of our business.

We believe that a unique perspective is critical to solving complex problems and inspiring a new generation of consumers to think secondhand first.

Overall, as of December 31, 2022, 66% of our workforce identifies as female and 72% of our workforce identifies as minority, including 58% as Black or Latinx.

As of December 31, 2022, 60% of our senior leadership team, which includes executives, senior vice presidents, vice presidents, senior directors, directors and general managers of operations, identifies as female and 26% of our senior leadership team identifies as minority, including 3% as Black or Latinx.

All full-time United States based employees are eligible to participate in our employee stock purchase plan, eight weeks paid sabbatical after three years and 401k plan.

Available Information

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Further corporate governance information, including our corporate governance guidelines, composition of our board and its committees, and Code of Conduct, is also available on our investor relations website under the heading “Corporate Governance.” The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.

Corporate Information

We were incorporated in 2009 under the name ThredUp Inc.

as a Delaware corporation.

Our principal executive offices are located at 969 Broadway, Suite 200, Oakland, CA 94607, and our telephone number is (415) 402-5202.

Our website address is www.thredup.com.

Information contained on, or that can be accessed through, our website does not constitute part of this Annual Report on Form 10-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business