Tuesday , 22 January 2019
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Startup scores $500K so its Peach app can add new twists to designer-brand auctions

Startup scores $500K so its Peach app can add new twists to designer-brand auctions

A Berkeley, Calif.-based startup is emerging from stealth mode today with a newly raised $500,000 and a newly released app that gives you nine minutes to bid on high-end designer goods.

Founded in February, Sellegit is now making its Peach app generally available for iOS and Android. The new app — the company’s second, after a student marketplace app also called Sellegit that is oriented toward the Berkeley community — had been invite-only for the last month, during which time it garnered more than 5,000 users.

Peach adds some quirks to its auctioning to make it “more fun” and more unique, CEO and cofounder Jeff Zhang told VentureBeat.

“We tried to create a new fun way to shop,” he explained.

The “fun” includes the final minute of blind bidding for each nine-minute auction round, in which a designer-name product made available by several large Hong Kong retailers — like a Chanel handbag that might have listed for over $1,000 — is offered to the highest bidder.

In the first eight minutes of the round, users are told what place their bids are, but in the last minute no places are announced.

“That’s part of the excitement,” Zhang said. There’s also a practical side, he said, as the final blind bidding discourages people from bidding from multiple accounts, because they could end up bidding against themselves and wouldn’t know it.

Another quirk: The top, winning bidder only has to pay the second-highest bid to get the product.

The auction is not English-style, he said, in which you have to keep bidding to stay in the round. Instead, only one bid is required.

These characteristics help Peach stand out from such competitors as eBay and Tophatter, Zhang said. “They all use the English auction, they’re very slow, and [they’re] not that exciting,” he told us.

Only one auction is currently offered at a time, but Zhang said simultaneous auctions are being planned.

While the current auctions are intended for women, Zhang said the company intends to add men’s items “soon.” As an indication of the range of products, he noted that the original pricetags of offered handbags range from $50 to $3,000, and bidders generally get from 20 to 40 percent off.

The invite-only first month grossed about $50,000, he said, with the average customer spending about $600. The biggest spender dropped $7,000, and the lowest, $30.

The seed funding, from IDG Capital Partners, will be used for “marketing to acquire new users [and] for product development to improve” the app, Zhang said.

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