Children's clothing and gear are more expensive than ever. Kidsy is a sustainable solution for discount | Tech Crunch

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All parents know that raising children is expensive. Especially in those early years, when they quickly outgrow clothes or toys, leaving parents in a never-ending cycle of buying new items when old items aren't worn or used.

Register Kidsy, a new Chicago-based e-commerce startup aims to give consumers greater access to discounted baby and kids products by partnering with big brands, retailers and liquidation companies for their overstock and returns inventory. At the same time, it helps prevent overstock and liquidation items — like children's clothing — from ending up in landfills, which isn't good for the environment.

Kidsy doesn't just focus on clothes. It sells new and open-box (aka new but returned) items like strollers, car seats, toys, travel gear, nursery furniture and “other baby essentials.”

Kidsy's founders are Indian-born former business journalist Shresi Tandon and Turkish-born software engineer Sinan Sari, who co-founded the Y Combinator-backed SaaS startup. cube ( A startup It was just sold to competitor Chaunau) teamed up in April 2022 to launch the company, which recently closed what Tandon described as an “oversubscribed” $1 million in pre-seed funding.

“Almost all big retailers like Amazon, Macy's, Target, Kohl's, Walmart, Bloomingdale's don't restock customer returns because it's too capital and labor intensive for them,” Tandon, who serves as CEO of Kidsy, told TechCrunch. . “These items are usually shipped to other countries that buy liquidated American goods, or they are destroyed in landfills.”

Image Credits: Kidsy

Investors were drawn to the company's early success. Since emerging from its beta phase in September 2023, Kidsy has been operating It hit $1 million in annual revenue by January — just four months later, according to Tandon.

New York-based Impellant Ventures led the Kidsy financing, which also included participation from Hustle Fund, Everywhere VC, The Fund Midwest and Responsible Ventures. Angel investors also put money in the round, including Initialized Partner and Rent the Runway co-founder Jenny Fleiss, DraftKings founder/CEO Jason Robbins, Butcherbox founder Mike Salguero, Trucks VC. Managing Partner Reilly Brennan and Calibrr Co-Founder Sanuk Tandon. They also include “a mix of movie financiers” as well as high-net-worth individuals such as Minnesota Vikings owners Mark and Jane Wilf; Christina Weis Lurie, co-owner of the Philadelphia Eagles and Todd Dagres, co-founder of Spark Capital.

Children's clothing: a huge market

Tandon's path to founding Kidsy began when she founded her own media production company after working as a journalist for Bloomberg TV and ABC News. Through that company, she directed award-winning for three years Feature documentary On child labor in global supply chains. During that time, she became aware of the inventory glut in the US as well as “all the supply chain issues facing retailers.”

She also learns that liquidation and returns are a A $761 billion industry annually in the US.

But when Tandon was pregnant with her first child she decided to be a “smart” consumer and shopped for liquidated baby products instead of paying full-price. It was then that she noticed a gap in the market and asked, “Where's the TJ Maxx or Burlington for all the baby gear and baby stuff?” she asked herself.

While there are plenty of liquidation and overstock e-commerce companies, few specialize in kids' gear or are really focused more on being a used-gear marketplace for parents.

While pregnant, Tandon started her company.

When she started fundraising as a mother-to-be, Tandon said, “It's sad to constantly read the statistics about the dominant 'boys club' in the VC world for women entrepreneurs and how tough it is in general. Companies have grown in 2024 compared to just two years ago.

“I didn't want to be a statistic, so I hid my pregnancy,” Tandon told TechCrunch.

She later decided to “never do that again” and told VCs beforehand that she is now a mother of one. VCs who see that as a problem, “are not the right investors for me,” she says.

Investors, Tandon said, are excited to support TJ Maxx for Kids, the retailer claims. Has outperformed the S&P 500 over the past 5 years and the secondhand baby and children's products market It is expected to reach $12.8 billion by 2030.

“We ship these items directly to our warehouse in Nebraska, inspect them, grade them, and then sell them, not on consignment or through a third-party logistics provider,” she said.

Majority of products are brand new and unused. About 10% are used gently, which is also sold by Kidsy.

Already kidsy According to Tandon, it has tens of thousands of users. The company gets a 'take rate' on every item sold. According to Tandon, its percentage varies across the brands and categories it sells, but averages around 35%.

Tandon knows there are plenty of competitors selling baby products.

But investors like Impellant Ventures managing partner David Brown believe Kidsy is “addressing very real pain points for parents and breathing innovation into a sustainable marketplace.”

“Yes, the offering is cheaper than others and has benefits for the environment, but it's how they tend to the evolving needs of parents that will and will continue to set Kidsy apart.”

Kidsy plans to use its new capital on hiring to expand its 12-person team, adding more partners.

For now, the startup is focused on the US market, though Tandon believes Kidsy could expand to any country that “has easy retail returns policies and where brands struggle to manage both their returns and their excess inventory.”

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