All parents know that raising children is expensive. Especially in the early years, when they quickly outgrow their clothes or toys, parents get stuck in a never-ending cycle of buying new stuff and old stuff with little wear or use.

Enter childishis a new e-commerce startup based in Chicago that aims to provide consumers with more opportunities to discount baby and children’s products by partnering with big brands, retailers and liquidation companies to solve the problem of overstock and returned inventory. At the same time, it also says it can help prevent overstocked and liquidated items, such as children’s clothing, from ending up in landfills, which is obviously bad for the environment.

Kidsy doesn’t just focus on clothing. It sells new and open-box (a.k.a. new but returned) items such as strollers, car seats, toys, travel gear, baby furniture and “other baby essentials.”

Kidsy was founded by Shraysi Tandon, an Indian-born former business journalist, and Sinan Sari, a Turkish-born software engineer who also co-founded the Y Combinator-backed SaaS startup Cooper ( a start-up company Just sold to competitor ChowNow). The two joined forces in April 2022 to launch the company, which recently closed a $1 million pre-seed round that Tandon described as “oversubscribed.”

“Almost all major retailers like Amazon, Macy’s, Target, Kohl’s, Walmart, Bloomingdale’s will not replenish customer returns because doing so is costly and labor intensive for them. Too dense,” Kidsy CEO Tandon told TechCrunch. . “These items are often shipped to other countries that purchase liquidated U.S. merchandise or are destroyed in landfills.”

Image Source: childish

Investors were attracted by the company’s early success.Since ending its beta phase in September 2023, Kidsy has successfully Just four months later, annualized revenue hit $1 million by January, according to Tandon.

New York-based Impellent Ventures led Kidsy’s financing, with participation from Hustle Fund, Everywhere VC, The Fund Midwest and Responsible Ventures. Angel investors also participated in this round of financing, including Initialized partner and Rent the Runway co-founder Jenny Fleiss, DraftKings founder/CEO Jason Robins, Butcherbox founder Mike Salguero, Trucks VC Managing partner Reilly Brennan and Kalibrr co-founder Sanuk Tandon. They also include a “portfolio of film financiers” as well as high-net-worth individuals such as Minnesota Vikings owners Mark and Jane Wilf; Christina Weiss Lurie, Philadelphia Eagles Todd Dagres, co-owner of the Philadelphia Eagles and co-founder of Spark Capital.

Children’s clothing: a huge market

Tandon’s path to Kidsy began when she started her own media production company after working as a reporter at Bloomberg TV and ABC News.Through the company, she spent three years directing an award-winning film feature documentary Child labor in global supply chains. During that time, she learned about the excess inventory that exists in the U.S. and “all the supply chain issues that retailers face.”

She also learned that liquidation and return are a A $761 billion industry every year in the United States.

But when Tanden became pregnant with her first child, she decided to be a “smart” consumer and buy liquid baby products instead of paying full price. That’s when she noticed a gap in the market and asked herself, “Where is the TJ Maxx or Burlington that sells baby and children’s products?”

While there are many e-commerce companies with liquidations and overstocks, there are few that specialize in children’s gear, or they are actually more focused on providing a second-hand gear market for parents.

Tanden started her company while still pregnant.

When she started fundraising as an expectant mother, Tanden said she was “nervous, constantly reading statistics about how difficult it was for female founders, the dominant ‘boys’ club’ that existed in the venture capital world, and the general How difficult it is to be a female founder. Companies will raise more money in 2024 than they did two years ago.”

“I didn’t want to become a statistic, so I hid my pregnancy,” Tanden told TechCrunch.

She later decided she would “never do it again,” and now tells venture capitalists in advance that she is a mother of one. Venture capitalists who see this as a problem “are not the right investors for me,” she said.

Tandon said investors are excited about supporting TJ Maxx for kids, noting that the retailer Outperformed the S&P 500 over the past 5 years The market for second-hand baby and children’s products 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 rather than on consignment or through a third-party logistics provider,” she said.

Most products are brand new and unused. About 10% are for gentle use, also sold by Kidsy.

Already very childish According to Tandon, the company has tens of thousands of customers. The company has an “acceptance rate” for every item it sells. According to Tandon, the ratio varies depending on the brand and category sold, but the average is 35%.

Tandon realized there were many competitors selling children’s products.

But investors like David Brown, managing partner at Impellent Ventures, believe Kidsy “is solving several very real pain points for parents and bringing innovation to a stable market.”

“Yes, the product is cheaper than others and is better for the environment, but it’s the way they cater to parents’ changing needs that makes Kidsy stand out.”

Kidsy plans to use the new funding to meet typical hiring growth needs, expand its 12-person team and add more partners. It also plans to embed artificial intelligence and machine learning into its products “to improve operational efficiency.”

For now, the startup is focused on the U.S. market, but Tandon believes Kidsy could expand to any country that “has loose retail return policies and brands struggle to manage returns and excess inventory.”

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