Whatnot, an online marketplace for buying and selling collectibles, raised $50 million of Series B ... [+]
Grant LaFontaine and Logan Head left high-paying, stable jobs in December 2019 to launch Whatnot, an online marketplace and shopping platform for collectibles. They were like most entrepreneurs in that they were confident in their product and driven to succeed. But even they couldn’t have imagined how fast they would be able to attract attention and money within the venture capital community.
Today, Whatnot is announcing it has raised $50 million in a Series B round led by Anu Hariharan from Y Combinator Continuity, which has invested in companies such as Coinbase, DoorDash and Stripe. Other investors include Andreesen Horowitz, which was an early investor in Facebook, Instagram, Pinterest and dozens of other companies; Animal Capital, a recently formed Los Angeles VC firm; musicians Ryan Tedder and DJ Skee; and NFL players DeAndre Hopkins and Bobby Wagner.
The latest round comes just three months after Whatnot raised a $20 million Series A round and seven months after it secured a $4 million seed round. Lafontaine wouldn’t disclose what the latest round values the company at, but he noted it was a “healthy increase” in valuation from the Series A round, which Andreesen Horowitz led.
Whatnot has a traditional marketplace like eBay and other platforms through which people can buy and sell items, including Funko Pops
“The live shows and shopping side of the business is the most important area for us,” LaFontaine said. “It’s where we invest 95-plus percent of our resources. It’s such a fun, community-led experience. It’s the thing that people love and come back for the most.”
LaFontaine noted that live online shopping is a $170 billion market in China, where it’s very popular. But he estimates live shopping is just a $1 billion business in the U.S., although he expects it to grow in the coming years. LaFontaine added that Facebook, TikTok and Amazon
“It’s my belief in five to 10 years, the numbers (in the U.S.) will look like they are in China today,” LaFontaine said. “Part of why we’ve grown so fast is there’s clearly an appetite for this. Consumers and sellers love it. It seems clear to me the market’s going to get very big here.”
Whatnot expects much of that growth will be fueled by sports collectibles. Until last October, the company focused exclusively on Funko Pops before expanding later in the year to Pokemon cards and in January to sports cards.
Lafontaine wouldn’t disclose Whatnot’s overall sales volume, but he said the company sells millions of dollars of sports cards per month, which have become the most popular category. The company takes an 8 percent cut of sellers’ sales, which average about $40 per item and range from $1 to $20,000.
Whatnot’s customers are particularly drawn to so-called card breaks in which people buy a box of sports cards that contain several packs. After people purchase the pack, the sellers open them and allow others to see what cards people have bought.
Whatnot this month also began selling sports memorabilia, including autographs, jerseys, helmets and game tickets. The company currently has 11 categories, which is far below the 4,500 offered on eBay, giving Whatnot plenty of room to grow.
“Our dream with Whatnot is to cater to all collectors,” LaFontaine said. “There’s quite an extensive list of categories we have our eyes on.”
The company plans on using proceeds of its Series B round to invest in the product, expand into more categories and increase its staff of 40 full-time employees to 120 by the end of the year. It’s looking to hire engineers, marketers and operations personnel who can handle customer support, back-office functions and other areas of the business.
Whatnot’s growth has come at warp speed for LaFontaine, its chief executive who was previously a product manager at Facebook, and Head, its chief technology officer who was previously a product manager at GOAT, an online marketplace for buying and selling sneakers. Still, the co-founders and friends have their sights set on bigger goals.
“When you start out to go and build something, I think you always have this big dream of how monstrous of a company you can create and how many peoples’ lives you can affect and do so in a positive way,” LaFontaine said. “You look at Google
But, he added: “Even in my highest of expectations, I’m not sure I would’ve anticipated the rate at how this has grown and how much people have loved it. Buyers have loved it. Sellers have loved it. We’re going to take advantage of this and try and turn it into one of those companies people know by name.”
