Whatnot raises $260M Series D at $3.7B valuation

Whatnot, the Los Angeles-based live shopping platform, said it raised a $260 million Series D on a $3.7 billion valuation.

Why it's the BFD: In a tough fundraising environment, the size and value of the raise stand out. It's a major bet on the future of live commerce in the U.S., which is already a $600 billion industry in China, according to Whatnot.

• The Series D raised Whatnot's valuation 2.5x from its $1.5 billion valuation in September 2021, when it raised a $150 million Series C round.

Of note: It's the second raise this week by a social commerce site, following Flip's $60 million Series B round.

Details: The financing was led by DST Global and returning investor CapitalG.

• Others participating included new investor Bond, and returning investors Andreessen Horowitz and YC Continuity.
• Proceeds, all new traditional growth equity with no debt, will be invested in product development and hiring in the areas of engineering, design, sales and marketing, Whatnot CEO Grant LaFontaine tells Axios.

By the numbers: The company claims it is the fastest-growing independent marketplace in the U.S., with sales increasing 20x year over year while tripling its monthly sales so far in 2022.

• LaFontaine declined to comment on its gross merchandise value (GMV) or revenue.

What's next: The company wants to help tackle supply chain woes.

• "Sourcing significant supply is a challenge, so there's going to end up being a lot of innovation on the supply chain for how live shoppers source products, so that's an area we're excited to dive into," LaFontaine elaborates.

Meanwhile, Whatnot is focused on putting capital to work and growing organically. LaFontaine didn't rule out an eventual IPO when asked, though he said a public debut is not on the company's near-term horizon.

State of play: Whatnot's standalone competitors include CommentSold, with over $2.8 billion in GMV; Verishop, which recently raised a $40 million Series B; as well as Flip, among others.

• Social media networks YouTube, which recently partnered with Shopify, and Facebook also play in the space. TikTok, on the other hand, has reportedly dropped its expansion plans for the U.S.

The big picture: "The funding markets for a lot of growth-stage companies have closed down," LaFontaine says, adding that Whatnot was "very, very fortunate."

• "We realize that there's not many companies that are able to do that sort of round in a time like today," he says.

The bottom line: "The business is set up to weather any storm, and when you look at the social commerce market, that's going to be an incredible market," he says.

Editor's note: This story has been corrected to reflect that CommentSold has over $2.8 billion in GMV, instead of over $1 billion.