Investors are not done pouring money into shopping apps. Proof: Wish just landed a sweet new round of funding for its “wishlist” app for discounted shopping.
The San Francisco-based company just announced that it has raised $50 million, its third round of institutional funding.
Wish, as its name suggests, provides a wishlist-like experience. The app offers shoppers a feed of discounted products, mostly apparel, which shoppers can then add to wishlists or “recommend.” As folks browse, the app learns about their taste so it can make better recommendations.
And, of course, people can also purchase the items through the app.
Wish cofounder and chief executive Peter Szulczewski believes the app is doing so well because it mimics the real-life shopping experience of a mall—window-shopping and occasional purchasing, as he told the Wall Street Journal. Wish now has more than 31 million active users. The items also sport fairly low prices, enticing shoppers to keep buying.
“It’s like Pinterest for people without a lot of money and loud taste. It is very popular, like Walmart online, but not really,” said one investor familiar with Wish who asked to remain anonymous.
While there are a lot of shopping apps with a variety of models, Wish appeals to the the Walmart, Target, and TJMaxx crowd.
The company makes money by charging its 10,000 merchants a 15 percent transaction fee for each item they sell. That’s pretty high, but many report substantially higher sales because of the app.
Wish raised its $50 million round from Founders Fund and previous investors Formation 8, GGV Capital, and Yahoo cofounder Jerry Yang, along with others. The company is now reportedly valued at about $400 million, according to the Journal‘s sources. Szulczewski said that the company will use the new funding to get more merchants on board and expand its team.
Wish was founded in 2010 by Danny Zhang and Peter Szulczewski. The company raised $19 million in April, and this latest round brings its total funding to $80 million.