South African media company Naspers hopes to capitalize on a lack of innovation in U.S. mobile classifieds with $100 million in funding for letgo — a mobile app that lets users buy and sell items locally, Techcrunch reports.
On Thursday letgo announced it has raised its first round of funding from Naspers, which also owns stakes in some huge tech companies including classifieds platform OLX, China’s Tencent, India’s Flipkart, and Russia’s Mail.ru.
Based in New York and Barcelona, Letgo was founded by Alec Oxenford, founder of OLX. Oxenford is still chairman of OLX, which has more than 240 million users in emerging markets such as India, Brazil and Poland.
“We built letgo because we saw an immense opportunity for innovation and growth in this space, particularly in the U.S.,” Oxenford said, according to TechMoran. “Our platform makes buying and selling household items faster and more intuitive than ever before.”
Hailing from Argentina, Oxenford isn’t a recognizable name in American business circles, but in South America, he’s a CEO rock star of sorts, Fortune magazine reported in a story entitled “Meet OLX, the biggest web company you’ve never heard of.”
OLX was funded by U.S. venture firms including Bessemer Ventures and General Catalyst Partners, and sold a majority stake to Naspers in 2010, according to Fortune.
Techmoran describes letgo as a new-generation OLX.
In an October 2014 Fortune interview, Oxenford said he had no desire to compete in the U.S. or other developed countries. There’s too much opportunity elsewhere.
A lot changed in 10 months.
Already, the majority of letgo users are from the U.S. or Europe. Oxenford and Naspers are looking to take it to the next level with an aggressive entry into the U.S. market in the coming months, Telecrunch reports. Oxenford brings solid experience in online classifieds to the U.S. endeavor.
“Alec has distinguished himself as an expert with an extraordinary track record in mobile e-commerce,” said Martin Scheepbouwer, CEO of Naspers Classifieds, BusinessWire reported. “We have seen firsthand Alec’s ability to execute on his vision as we worked together to build OLX into the global force it is today. In letgo, Alec has built a platform that is perfectly tailored to the American consumer, and we’re excited to help his team take it to the next level.”
Even without the marketing dollars, letgo grew to more than 2 million downloads since its launch earlier this year, and it’s a top-10 ranked free shopping app in Google Play in the U.S., Sweden, Turkey, New Zealand, Norway, Italy and Spain, according to Telecrunch.
“Letgo is perfectly tailored for the typical American consumer,” Oxenford said. “It’s a fun, easy to use, and highly visual mobile marketplace that allows users to post, buy, sell and communicate with each other instantly and for free.”
But the app will have significant competition in the U.S. from Craigslist and eBay. Still Oxenford thinks he can do better because letgo’s focus is mobile first.
“There has been a lack of innovation in the U.S. classifieds space, particularly when it comes to mobile,” Oxenford said, according to Telecrunch. “We think letgo’s mobile-first design, which is streamlined to make buying and selling locally easier and faster than ever, is a key advantage for our platform.”
Letgo isn’t taking a percentage of sales and it hasn’t said exactly how it plans to make money.
“The app reminds me of Facebook’s Groups which, though a broader platform for creating online communities, today has a significant number of groups dedicated to local selling,” Sarah Perez wrote in Telecrunch. “Much like letgo, Facebook Group members can quickly post items, view each other’s profiles, and kick off private chat sessions by way of Facebook Messenger.
“Letgo is basically the non-Facebook version of what otherwise seems to be a similar shopping environment. But one advantage letgo has over Facebook is that Facebook only lets you search for items across a single group, when you may belong to several local selling groups.”
