Holding excess or surplus poses a risk for brands and retailers as this inventory ties up cash flow, has storage costs, and faces the risk of obsolescence and not selling, leading to loss in expected revenue. When it comes to the liquidation of this inventory, brands and retailers aren’t exactly in the business of publicly announcing their surpluses. Ghost is a B2B members-only marketplace for excess retail inventory. Since its launch out of stealth last summer, the company has added 1000+ members that include the world’s largest retailers and brands across an array of product types including apparel, footwear, beauty, and home goods. All buyers on the platform are vetted and Ghost offers sellers a data analytics engine that handles optimal pricing, volume, and forecasting, while handling the end-to-end logistics associated with the transaction. The one-stop-shop has handled listings for items with $1B+ in MSRP with gross merchandise value (GMV) growing 10x in the last year.
LA TechWatch caught up with Ghost Cofounders Josh Kaplan and Dee Murthy to learn more about the business, the company’s strategic plans, latest round of funding, which bring the company’s total funding raised to $55M, and much, much more…
Who were your investors and how much did you raise?
We raised $30M in Series B funding. Cathay Innovation led the round with participation from existing investors Union Square Ventures, Equal Ventures, and Eniac Ventures.
Tell us about your product or service.
Ghost is a private, B2B platform for buying and selling coveted inventory. Focusing on retail goods, we match sellers of top-quality products to a network of diverse retail partners. The Ghost platform makes the distribution of the world’s best goods easier than ever before. Our vision is to create a world where every product reaches its full potential.
The platform acts as a shoppable marketplace, where customers can view inventory curated for their needs. Our categories include footwear, apparel & accessories, bath & beauty, and home goods.
What inspired the start of Ghost?
Ghost was born from our own necessity. We previously owned and operated the Five Four Group, a holding company for fashion brands and services. It includes brands such as Five Four, Young & Reckless, New Republic, GRC, subscription service Menlo Club and e-commerce site Menlo House. During COVID, we needed a product like Ghost more than ever, so in October 2021 we launched it ourselves.
How is it different?
Ghost is solving the frustrations that have held retail brands back for far too long. Our members use our platform for three key reasons: the value we create, the simplicity of the process, and the control they maintain over their goods.
Network effects: Long tail buyers get access to the world’s best brands at closeout prices for the first time. This drives demand and disaggregation, which increases value for our sellers.
Product: Our platform scales our ability to fully service sellers and curate inventory for buyers.
Data: Ghost Intelligence provides a full suite of tools to increase volume and conversion of offers.
What market are you targeting, and how big is it?
Buyers: Enterprise retail, Independent Retail, Liquidators, Subscription boxes, and International.
Sellers: Brands and retailers, wholesalers, and manufacturers.
What’s your business model?
We have a traditional marketplace take rate per transaction.
How are you preparing for a potential economic slowdown?
We are constantly adjusting our GTM strategy based on sell-through and buyer demand. We have seen greater volumes of inventory due to the slowdown and are targeting coveted goods with more inelastic demand.
What was the funding process like?
We were fortunate to have a relatively seamless fundraising process, though the thoroughness in the diligence process was certainly higher than previous years.
What are the biggest challenges that you faced while raising capital?
Because we raised Series B capital when our company was <2 years old, the volume of data was more limited than typical Series B rounds.
What are the milestones you plan to achieve in the next six months?
Our goal is to continue onboarding the best brands in the world across apparel, footwear, beauty, home, and electronics. Given that we work with nearly all of the large retailers, we’re also focusing on acquiring small/medium sized buyers and international buyers. Our product and engineering team are consistently shipping features to provide our platform with all the data necessary to make smart buying and selling decisions.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
It’s no secret that cash efficiency and profitability metrics are more important now than during the bull market, which is a smarter way of building businesses. We are constantly adjusting our opex / hiring based on our growth and trying to do more with less. We also are focused on scrappy but high-ROI marketing initiatives.
It’s no secret that cash efficiency and profitability metrics are more important now than during the bull market, which is a smarter way of building businesses. We are constantly adjusting our opex / hiring based on our growth and trying to do more with less. We also are focused on scrappy but high-ROI marketing initiatives.
Where do you see the company going now over the near term?
Our goal is to provide an end-to-end solution to enable any brand to gain distribution and scale.
What’s your favorite outdoor activity in LA?
We both like to run.
