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United States securities and exchange commission logo
January 14, 2021
James G. Reinhart
Chief Executive Officer
ThredUp Inc.
969 Broadway, Suite 200
Oakland, CA 94607
Re: ThredUp Inc.
Amendment No. 1 to
Draft Registration Statement on Form S-1
Submitted December
28, 2020
CIK No. 0001484778
Dear Mr. Reinhart:
We have reviewed your amended draft registration statement and
have the following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Amendment No. 1 to Draft Registration Statement on Form S-1, submitted
December 28, 2020
Prospectus Summary
Distributed Processing Infrastructure
Data Science Expertise
Marketing Automation, page 7
1. Please disclose how you
calculate "marketing payback."
"The global COVID-19 pandemic has had . . .", page 26
2. We note your disclosure
that "[o]ur shipping vendors have informed us that they will be
implementing December
2020 holiday surcharges due to expected increases in holiday
James G. Reinhart
FirstName LastNameJames G. Reinhart
ThredUp Inc.
Comapany
January 14,NameThredUp
2021 Inc.
January
Page 2 14, 2021 Page 2
FirstName LastName
shipping as a result of COVID-19 travel restrictions and other
impacts. We expect to delay
our shipping times in order to minimize the impact of such surcharges
on our business, but
such surcharges or the delays in shipping could harm our business."
Please amend your
disclosure to quantify the impact of any surcharges or delays in
shipping that occurred
over the holidays, if material.
Risk Factors
Risks Related to Our Business
Interruptions or delays in the services provided by third-party data centers
.. . . , page 34
3. We note your response to comment 5. To provide context for investors
regarding the
importance of the agreement to your operations, please amend your
filing to disclose that
transitioning the cloud infrastructure currently hosted by AWS to
alternative providers
could potentially be disruptive, and you may incur significant costs
for a short period, as
you assert in your response.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Overview, page 73
4. Please provide a GAAP calculated margin in the bullets listed in the
Overview on page 73
pursuant to Item 10(e)(1)(i)(A) of Regulation S-K.
Our Business Model, page 75
5. We note that you track order economics using contribution profit which
is defined as
gross profit less distribution center operating expenses associated
with inbound item
processing, less payment processing. This measure appears to be a
Non-GAAP measure
that should be reconciled to Gross Profit pursuant to Item
10(e)(1)(i)(B) of Regulation S-
K.
Compelling Cohort Behavior and Expansion, page 78
6. We note your response to comment 12. It does not appear that the 2015
cohort is
comparable to the other cohorts in your presentation because the 2015
and prior cohort
includes buyers who made their initial purchase in one of at least
five years, while the
other cohorts include buyers who made their initial purchase in one
year. Therefore, the
growth in gross profit for the 2015 cohort appears to include at least
six years of growth
for some buyers by the time they enter year 2016 presented in your
chart, while the
remaining cohorts include only one year of growth by the fiscal year
following the initial
purchase year. Please amend your filing to disaggregate the 2015 and
prior cohort data.
Consider providing this information in a footnote or separate table to
preserve your
desired visual presentation of the development in gross profit for
each cohort.
Scaling and Automating Our Platform, page 79
7. We note your response to comment 13, and your amended disclosure on
page 78,
James G. Reinhart
FirstName LastNameJames G. Reinhart
ThredUp Inc.
Comapany
January 14,NameThredUp
2021 Inc.
January
Page 3 14, 2021 Page 3
FirstName LastName
including that you expect the automation of the remaining distribution
facilities "over
time." To provide context for investors regarding your plans and the
time it will take for
you to realize the benefits of automating your facilities, please
disclose an estimated
timeframe by which you expect to replace your legacy non-automated and
lesser-
automated facilities with new automated facilities, or tell us why you
are unable to do so.
Further, please tell us why you determined not to disclose current
labor, processing, and
distribution costs and expenses for your Arizona and Pennsylvania
facilities compared to
your other distribution facilities to provide context for your
assertion that achieving the
same level of the automation at your Arizona and Pennsylvania
facilities in your full
platform would result in favorable economies of scale.
Supply Breadth, Quality and Processing Growth, page 81
8. We note your response to comment 15, and your amended disclosure on
page 82 that
"[w]hen ordering a Clean Out Kit, a seller may opt-in to our Return
Assurance service in
order to have any unaccepted items returned to them for a flat fee.
Otherwise, we sell the
remainder of all unaccepted items to select aftermarket partners, such
as thrift stores and
textile recyclers, for reuse and recycling." Please disclose the flat
fee, and the percentage
of your revenue attributable to sales of items to thrift stores and
textile recyclers, if
material.
Key Financial and Operating Metrics, page 86
9. We note your response to prior comment 17. Please revise to present
the most directly
comparable GAAP measures [net income (loss) and net profit margin] in
the table
provided on page 86 when presenting Adjusted EBITDA and Adjusted
EBITDA Margin.
Refer to Item 10(e)(1)(i)(A) of Regulation S-K. Additionally, please
revise the title of the
discussion beginning on page 87 currently titled "Adjusted EBITDA and
Adjusted
EBITDA Margin" to include "Net income (loss) and Net profit margin."
Business
For Resale-as-a-Service (RaaS) Partners, page 120
10. We note your response to comment 24, including that your RaaS
partnerships are an
important component of your offerings and your mission. Therefore,
please briefly
describe the material terms of your agreements with your RaaS
partners.
Our Employees, page 121
11. Please amend your disclosure to describe any human capital measures or
objectives that
you focus on in managing your business, if material. See Item
101(c)(2)(ii).
Executive Compensation, page 138
12. Please revise to provide information for the most recently completed
fiscal year. Refer to
Item 402(n) of Regulation S-K.
James G. Reinhart
ThredUp Inc.
January 14, 2021
Page 4
You may contact Blaise Rhodes at (202) 551-3774 or Theresa Brillant at
(202) 551-
3307 if you have questions regarding comments on the financial statements and
related
matters. Please contact Katherine Bagley at (202) 551-2545 or Lilyanna Peyser
at (202) 551-
3222 with any other questions.
Sincerely,
FirstName LastNameJames G. Reinhart
Division of
Corporation Finance
Comapany NameThredUp Inc.
Office of Trade &
Services
January 14, 2021 Page 4
cc: Bradley C. Weber
FirstName LastName