Treet is helping startups—and fashionistas—clean out their closets. Sonia Yang cofounded the company in 2021 to help brands reduce waste (and inventory costs) by setting up sites that enable customers to purchase pre-owned pieces directly from retailers. That allows companies to get in on the fast-growing $43 billion used-clothing market, lots of which is currently sold on peer-to-peer marketplaces like Depop and Poshmark. “These transactions are going to happen whether you like it or not,” Yang says, “so why not lean into it? Own those customers and be a part of a more sustainable future.” More than 200 companies including Girlfriend Collective and Tecovas have hired Treet to manage their used-product programs. Treet takes a 10% to 20% commission on each sale. “We are purely a software company,” Yang says. “We never hold any inventory, and whenever logistics is involved, we partner with other people.” Treet has raised $16.4 million.
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Category
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LifestyleTranscript
00:00The returns industry is one, a very costly industry and also a very wasteful industry.
00:04A lot of items that you return are most likely going straight to the landfill.
00:07They're not being resold.
00:09So we want to make sure that those items still find a home.
00:15I'm here with Sonia Yang, the founder of Treat,
00:19which is a retail clothing technology company.
00:22Yes, we are.
00:2330 seconds.
00:24Tell me about yourself and what you do.
00:27Well, I'm Sonia.
00:28I'm the CTO and co-founder at Treat.
00:30And what we do at Treat is we create branded resale experiences.
00:34And what that might look like is a peer-to-peer experience,
00:37a trade-in experience, a recycling program, or all in one.
00:40And we're helping brands be more sustainable,
00:42drive revenue through resale, and extend their customer LTV.
00:46I love this.
00:46Give me a specific example of like through the life cycle of using Treat.
00:53Yeah.
00:54So let's say a consumer is shopping on a website.
00:58And as they're shopping through the product pages,
01:01you'll see a little widget on their product page that says estimated resale value.
01:05That's, say, $100, even though the item itself is $200.
01:10So immediately, you'll be like, OK, I can buy this for $200.
01:13And I can sell this later on for $100.
01:15I'm essentially buying this for $100.
01:17So I'm shopping for like a blazer, let's say.
01:18Yes.
01:19And it's a widget.
01:21Do I download this in a Chrome extension?
01:23No. So like our brands will download this widget on their sites.
01:27Oh, OK.
01:27So it'll just show up.
01:28You know how you see like Klarna and Affirm on product pages?
01:31We do the same thing.
01:33So this is actually a newer feature that we just launched.
01:36So once the consumer knows kind of top-of-mind resale is part of this brand's journey,
01:41they're more likely to convert, buy the item.
01:43Once they've used it for however long, they're ready to resell.
01:46Then they will come to the brand's Treats Marketplace
01:49and sell it to other peers who also love that brand.
01:52OK.
01:53What kind of brands are you partnering with so far?
01:55Give me some examples.
01:56Yeah, we partner with a lot of top D2C brands on Shopify.
02:00So Girlfriend Collective, Doen, Represent from the UK,
02:05Kutz, a little bit of men's and women's wear.
02:08Also just tapped into bridal wear.
02:09So Ghali Mahav and so forth.
02:12So you're a retail company that works.
02:14Your clients are actually other retail companies.
02:17Correct. Yes, they're brands.
02:18OK.
02:18And now if I'm, I see when I'm buying something, I get my resale value.
02:23What if I'm looking to buy secondhand?
02:25Where does that come in?
02:26Do I deal with you?
02:27Do I deal with the other brands?
02:28How does that other side all work?
02:29Yeah, so the brands launch their own resale marketplace.
02:32That's their Treat Marketplace.
02:33That's where their customers will go straight to to buy and sell.
02:37So it's usually a microsite.
02:38It's a separate site from their main site.
02:41That's kind of becomes the community for that brand.
02:44Do you run that?
02:45Yes, we run end to end.
02:46We run all of support.
02:48We run the launch process.
02:50We launch, we were in charge of all the automated marketing that comes with it,
02:54making sure that the marketplace is vibrant and kind of in self-sufficient.
02:59Do you have to, are you in charge of logistics?
03:02Like, are you shipping the clothes back and forth?
03:05Is that up to the other company?
03:07Yeah, so we are a purely software company.
03:09We never hold any inventory whatsoever.
03:11Whenever logistics is involved, we will partner with other 3PLs
03:16or like people who specialize in that.
03:18So that's usually for our non-peer-to-peer program where it's usually managed.
03:22So the items need to go to someone,
03:24get authenticated or reworked before being sold again.
03:27How do you make money?
03:29So we make money in three ways.
03:30We have a monthly SaaS fee that we charge all of our brands.
03:34We also get a cut of every single transaction that happens on these Treat Marketplaces.
03:39And we also charge a setup fee.
03:42What were you doing before you co-founded Treat?
03:45I was a software engineer at Airbnb.
03:48So yeah, my background is in software.
03:50What kind of stuff are you making at Airbnb?
03:53I was on the growth and search team.
03:55So really helping, you know, Airbnb's double-sided marketplace also grow
04:00and learned a lot about how marketplaces worked there.
04:02And on the search team, just, you know,
04:04worked with some of the most talented engineers to make Airbnb search like the best
04:08and helping guests find exactly the place they're looking for.
04:12Are you a computer science major?
04:14I am.
04:14How did you get into tech?
04:16Yeah.
04:16How did you get interested in tech, I should say?
04:18Yeah, yeah.
04:18So I was very privileged to have taken my first CS class in high school.
04:24You mentioned you're from Silicon Valley.
04:25I'm from Silicon Valley.
04:26So I was surrounded by tech.
04:27I would say my whole life.
04:28And I think it was a very cool experience trying to,
04:31or not trying to, but like being able to experience everything first.
04:34So like Uber, we saw Uber first.
04:37We saw the self-driving cars first.
04:38And I think that kind of inspired something in me
04:40and being at the forefront of technological advances.
04:44But yeah, I took my first CS class in high school.
04:46Very privileged to have done that.
04:48Actually, I'm going to correct myself.
04:49I actually took a CS class in middle school.
04:51Yeah, that's very impressive.
04:52But it was for this language called logo, where you use computer science.
04:56Lego logo, right?
04:58Yeah, you like draw things with it.
04:59Okay, yeah.
04:59Anyways, it was very cool.
05:01But in high school, when I took that class, it was,
05:03I immediately knew that that was going to be my,
05:05what I was going to be doing for the rest of my life.
05:09My mom always joked that she was very worried
05:11that I would never find anything that I would enjoy
05:14because I can never sit still.
05:15Like I can never keep my attention on anything.
05:18But when I discovered computer science,
05:20I spent like an entire summer just on my butt
05:22coding a bunch of computer programs and mobile apps.
05:25And she was like, okay, I'm glad that she found something that she enjoys.
05:29You're sitting still and focusing.
05:30Yeah, yeah, yeah.
05:32So it sounds like you had a pretty exciting job at Airbnb.
05:35What led to the creation of Treat?
05:38And kind of what was the motivation saying like,
05:40I'm going to leave this, like, you know,
05:42it sounds like a dream job if you're a computer science person.
05:44Yeah.
05:44What made you make the jump?
05:46Yeah, so all of this started, I would say, around the pandemic.
05:49Treat is a pandemic baby.
05:51Okay.
05:51I absolutely loved my time at Airbnb.
05:54But I think during the pandemic, you know,
05:55work from home and just so much time on my hands,
05:58went through like a very introspective period of my life
06:00and like really try to figure out what I cared about,
06:03what I was passionate about,
06:04and what kind of impact I wanted to make in my life.
06:07So at the time, I decided to not start a startup, but join a startup.
06:11So I was in my hunt to find a smaller startup
06:15that aligned with my passion.
06:17So it was sustainability, health, fitness.
06:20And one of the things I did was I actually called up one of my friends.
06:22And she was like the only person I knew in the VC space at the time.
06:26And I was like, hey, what are the hot startups
06:28I should be looking at in these spaces?
06:30And she, being the lovely person she is,
06:32gave me a whole list, compiled it, gave it to me.
06:34And she was just casually was like,
06:36hey, you know, my boyfriend, he's also very into sustainability
06:40and also very into startups.
06:41Do you want to talk to him?
06:42So I was like, sure, more information could not hurt.
06:46So I called him and that was actually my now co-founder, Jake.
06:49And during that call, I think we just instantly clicked.
06:52We had very similar passions for sustainability,
06:55for the environment, for what we wanted to see in the world.
06:57And I also just very clicked with him as a person.
07:01I always say that in that call, I was like,
07:03you could be the CEO of a 1,000-person company,
07:05and I would believe you.
07:06You had the executive leadership, the presence.
07:09He was very articulate, very competent.
07:11And maybe the most important, he was a very genuinely good person.
07:16And from that call onwards, Treat was born.
07:18And yeah.
07:19So he wasn't already working on this.
07:21You guys started just kind of coming up with ideas
07:24that wanted to have the intersection of technology and sustainability?
07:29Exactly, yeah.
07:29So I think we were very passionate about sustainability.
07:31And I think both of us recognized the amount of waste
07:35in especially the fashion industry.
07:37So I think that was kind of where our passions aligned.
07:40And when we thought deeper on that,
07:42we realized we both cared a lot about resale as well.
07:45I just moved into a new place, and I basically furnished
07:48my entire place with just Facebook Marketplace items.
07:51So I was getting very into resale at the time.
07:53So everything just kind of lined up.
07:56Yeah.
07:56Has the idea for Treat, the plan,
07:59has it pivoted, morphed, switched from your original idea?
08:03And tell me how it has.
08:04Yeah, I wouldn't say it pivoted.
08:06I would say it's grown to something bigger than it was.
08:09In the beginning, we were very focused on peer-to-peer.
08:11So getting an item from one peer directly to another peer.
08:15We've expanded all of our models to trade-in, to recycling.
08:19And now we're very deep into figuring out off price and returns.
08:23What does that mean, off price?
08:24Yeah.
08:24So all brands have a lot of inventory that they could not sell
08:28on their main sites.
08:29So it's either previous season inventory,
08:31return items, or items with small quirks on it,
08:34like just maybe small defects.
08:35Stuff that might be in an outlet kind of thing?
08:37Exactly.
08:37Things that might be out of Nordstrom Rack or something.
08:40So we're finding ways to make sure that inventory
08:43sees the light of day, finds a new home.
08:46Our mission is to make sure every item lives its longest life.
08:49So whether that's pre-owned or the brand has on hand,
08:53we're just making sure we can find another home for them.
08:55How big are you guys right now?
08:56How many employees?
08:57We are at 25.
08:59And you're the CTO?
09:00I'm the CTO, yes.
09:01So what is your day in the life?
09:02What are your duties?
09:03What is your mission?
09:04Oh, man.
09:06I definitely wear many hats, I would say.
09:08There's part of my day that's being a co-founder.
09:11So looking at very high level metrics
09:13and making sure things are going the right way.
09:16Then there's also the engineer side of me.
09:18Sometimes I'm in project stand-ups and overseeing projects,
09:21making sure that everything's going smoothly there.
09:24I spend a portion of my day just going deep in product metrics
09:26and seeing what areas of improvements
09:29or things that we're doing very well in.
09:31There's also hiring, of course.
09:34God, yeah, my day-to-days honestly look very different.
09:37Goes from high level things to all the nitty-gritty stuff.
09:39So it's interesting that you're B2B,
09:42you're approaching these big brands.
09:44Give me the pitch.
09:45Pretend you're going to come in.
09:46I'm a big retailer and you are trying to pitch.
09:51Treat to me.
09:52What's your pitch?
09:53What's your spiel?
09:54Yeah, yeah.
09:54That's so funny because I am the CTO
09:56and I leave the pitches usually to the sales side.
09:59You're good at it.
10:00You sound like you know what you're talking.
10:01That's very nice.
10:02There's passion coming through.
10:03Yeah, yeah.
10:05I think a lot of our pitches are you're a big brand.
10:08You must know how many millions of dollars
10:10of inventory is being moved on resale marketplaces
10:13like Poshmark and Depop.
10:15You can either let those inventory continue being resold
10:19and give all of that revenue to these platforms
10:22or you can own it and be a part of it.
10:23These transactions are going to happen
10:25whether you like it or not.
10:27So why not lean into it?
10:29You know, own those customers
10:31and also just be a part of a more sustainable future.
10:34Sold, done, sign up.
10:36Hell yeah.
10:36What, how much money have you raised?
10:38We've raised 16, a little over 16 million.
10:40What's maybe tips and tricks about fundraising?
10:44Some tips and tricks.
10:45I think this is funny
10:46because fundraising is also more so
10:48in my co-founder's wheelhouse.
10:50I think when you walk into a room
10:52or not walk into because it's on Zoom
10:54but when we are Zoom into a room.
10:57Yeah, we Zoom into a room
10:58and we are kind of in the position
11:00where we feel like we're asking for money.
11:02We're not in a position of power.
11:03I think those are the times that we've struggled the most
11:06because I think that kind of energy really exudes
11:08and people can feel that.
11:10But when we, you know, do a pep talk before being like,
11:12you know, we are in the driver's seats.
11:14These people are, should feel like special
11:17to be a part of our journey.
11:19I think those, in those times,
11:21like I think it really, you know,
11:23people in the room can feel it.
11:24We've seen a lot more success.
11:25Flip it, you're like, they'll be lucky
11:27if we let them, if we take their money.
11:29Exactly, yeah, yeah, yeah.
11:31So you have 16 million in funding,
11:33you know, you guys, 25 employees.
11:35What are you focusing on right now?
11:37Like for the next year, what is everyone I treat
11:40like focused on?
11:41What's the goal?
11:42What's the aim?
11:44I think focus is always just growth.
11:46So, you know, we're not going to stop
11:48until every single fashion brand in the world
11:49has a circularity program,
11:51whether it's resale or recycling,
11:52whatever it might be.
11:54I think one big area of focus for us right now
11:57is what I mentioned earlier
11:58in the off price and return space.
12:00So we want to turn all returned,
12:03or sorry, all unsellable as new inventory
12:06that is returned.
12:08We want to make sure that those items
12:09are resold on treats.
12:11So the returns industry is one,
12:13a very costly industry
12:14and also a very wasteful industry.
12:15A lot of items that you return
12:17are most likely going straight to the landfill.
12:19They're not being resold.
12:20So for all of those items that, you know,
12:22just might be missing a packaging
12:24or missing a tag,
12:24we want to make sure that those items
12:26still find a home.
12:27So you're in growth mode.
12:28You want to get as many clients
12:30as you can on board.
12:31Absolutely, yeah.
12:32You're in the intersection of fashion,
12:34retail and technology.
12:36Fashion, yep.
12:37What trends, what predictions do you have
12:38the next year in the retail world?
12:41Yeah, I mean, long-term vision wise,
12:42like as I mentioned earlier,
12:44I truly believe that in the next 10 years,
12:46all fashion brands
12:47will have a circularity program.
12:49So I think it will be the norm for consumers
12:52to go to a brand's website and think,
12:55oh, what is their circularity initiative?
12:56Like, can I resell my clothes with them
12:59after I use it for a whole year?
13:00And I think when you shop in person,
13:02I think there should also be like a,
13:03not should, but there will be like a resale
13:05or a pre-owned section.
13:07And, you know, we're seeing it
13:08in all of the top retailers,
13:09even like Amazon is investing in this,
13:12SHEIN.
13:12So like, we have no doubt
13:14that everyone will follow suit.
13:16Sun Yung, thanks so much for joining us.
13:18Thank you so much.