With $1.1 million in seed funding, Venice Beach-based TradeYa wants to bring the ancient art of bartering to your mobile device. The company funds through a network of angel investors around LA and Silicon Valley, including Chris Hameetman of Tech Coast Angels and Joe Addiego, partner at Alsop Louie Partners.
The site – which is on track to add 25,000 to 30,00 new users this month – allows users to post pictures of items they are willing to part with, or services they can provide, and let’s them browse other items up for trade. When users find something they want, they simply click “want” and the negotiations begin. Last month, the site boasted $4.3 million worth of goods and services up for trade.
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TradeYa's CTO's Shantanu Bhardwaj on left and CEO Jared Krause
The company distinguishes itself from its competition with the core belief that “everybody’s got value, everybody has something to offer.” CEO Jared Krause said bartering is not equivalent to buying and selling: the interaction is social and happens in a different part of your brain. The company spent 2013 examining the science to figure out how to reverse engineer the process and make it as easy as possible for its users.
After coming out of beta testing in January, the site saw 20,000 new users sign up last month alone. Krause said he thinks they can double that rate, but right now the company is focused on improving the user experience. Krause said he spends time each day talking with users, who are enthusiastic about both the site and the concept, about how he can make the site better. Since launching in January, 2,000 users have clicked the “want” button, indicating the start of a negotiation. There are about 200 trades in progress on any given day.
iPhone users can expect a mobile application later this quarter, while Android users will need to wait until the following one. The mobile application will be even easier to use than the web-based platform, according to Krause, as it will enable users to walk around their home, take pictures of things they are willing to part with, and immediately upload them. This will make counter-offers easier, too.
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While Krause contends there’s a place for the “instinctual behavior” of bartering in today’s economy, it’s a new behavior online and there’s not yet a household name that people turn to. TradeYa hopes to change that.
So far, users are mostly trading goods, but as they become more familiar with the site, Krause expects to see more services offered. He said that people have a lot of skills that the economy doesn’t always value, but that other individuals do. “By connecting our users with other users that directly value their skills, we give people a whole new way to get value out of their talents,” said Krause.
Users hail from all over the US, but the company plans to go international in the third quarter of this year. They are looking at Europe and South America, areas they picked because the cultural barriers are smaller than expanding to Asia or Africa. But eventually, they plan to go global.
Krause says there’s money in bartering, too. The company will implement a $3 transaction fee per user this year. While it may sound like small potatoes, when scaled, those fees add up.
The company has 10 full-time employees and they plan to add a few positions to the roster, but most of the seed funding will go towards marketing.
