Letgo, an online marketplace for buying and selling used goods, said it raised $175 million to invest in growth plans and grab market share from EBay Inc. and Craigslist.
Existing investor Naspers Ltd., Africa’s biggest company by market value, led the company’s Series C round, which also included previous venture capital backers Accel Partners, Insight Venture Partners, New Enterprise Associates and 14W. The startup has raised $375 million in total so far.
Letgo, which has offices in New York and Barcelona, said annual transaction volume will hit $23 billion by the middle of 2017. Since rolling out its mobile app in 2015, the startup said it has racked up more than 45 million downloads and 20 million monthly active users. EBay has 165 million active buyers and handles about $20 billion in gross merchandise value each quarter.
Many startups have tried and failed to break dominance of EBay and Craigslist in the U.S. market for online used goods. It’s a tough challenge because the incumbents benefit from the network effect of an established online marketplaces with millions of listings to lure bargain-hunters.
Letgo is betting its technology will overcome this. The company touts artificial intelligence and image recognition capabilities that let users post items for sale by taking a photo. The Letgo app then automatically titles and categorizes the items based on the pictures, making the listing process…