Kids on 45th CEO Elise Worthy. (Kids on 45th Photo) had long been Seattle’s most well-known and oldest children’s consignment store. But in 2017, nearly 30 years after it opened, the tiny Wallingford retail shop was ready to shut down. That’s when stepped in and bought the business. Two years later, the tech entrepreneur has turned an old-school brick-and-mortar concept into an innovative e-commerce service that has shipped 500,000 items of used kids clothing to customers across the country. And now the Seattle startup is raising cash from top-tier investors to help fuel its growth. announced a $3.3 million funding round from YesVC, an early-stage firm co-founded by Flickr co-founder Caterina Fake; Maveron, the Seattle firm that previously backed e-commerce giants such as Zulily and eBay; and other investors including SoGal Ventures, Sesame Street Ventures, Collaborative Fund, Liquid 2 VC, and Brand Foundry Ventures. The company offers a unique solution to a problem that parents with young children often face: buying affordable clothes for their growing kids. The service takes advantage of partnerships with nonprofits and thrift organizations to source a supply of “nearly new” kids clothing that is discounted by 70-to-90 percent off similar products online. Customers select the types and sizes of clothing they need — four pairs of pants, three long-sleeve shirts, two dresses, etc. — and Kids on 45th stylists put together a curated box that is shipped to doorsteps. Items sell for as low as $1.99 each and an average of $3.29. There is no browsing process and the entire shopping experience is designed to take less than two minutes. “All of our competitors and incumbents rely on either a browse or discovery process,” Worthy told GeekWire. “We are specifically anti-browse. If you’re a mom who has a 5-year-old and a 2-year-old and they outgrow their pants, you won’t delightfully browse through clothes. You just want to solve the pants problem.” (Kids on 45th Photo) Worthy previously co-founded Seattle-based , a free nonprofit coding school for women that has graduated 250 students since in 2015. She left the day-to-day work at Ada in 2017 and had the opportunity to purchase Kids on 45th from the original owner. “It seemed like such a treasure trove of data,” said Worthy, who serves as CEO. “I thought it would be so cool to buy the store and figure out how to bring it online to be a web-scaled business.” Worthy not only started analyzing years and years of Kids on 45th purchasing data, but also observed customer experiences inside the store. Moms, especially those who don’t enjoy recreationally shopping, just wanted something to replace the clothes that their kids had outgrown. “It dawned on me that we were investing time in a browse experience that our customers didn’t want,” said Worthy, who has two young sons herself. The company has 15 employees in Seattle and another 15 people at its warehouse in Texas where garments are sorted into 350 categories. It has developed an efficient supply chain and distribution model to help keep handling costs low — it’s how items can be priced at such steep discounts, or as the company notes, “cheaper than Goodwill and Walmart.” Worthy described Kids on 45th as a “StitchFix-like experience without the cost or required subscription,” referencing the popular online clothing box service that also sells kids clothing. “We try to bring the StitchFix experience to 90 percent of Americans where that’s just not possible,” Worthy noted. Jason Stoffer, partner at Maveron who was an early board member at e-commerce giant Zulily, said the “rise in value retail offline has been unable to be replicated online until now, due to the difficulties of making the business model work.” “Elise and the Kids on 45th team have been able to sell clothing at radically low price points by challenging some of the shopping behaviors that have been accepted as a given up until this point,” he said in a statement. “They pass more savings onto their customers by pairing a global sourcing supply chain with taking on the burden of selection from moms, thereby reducing handling costs like photos, mannequins and returns.” Worthy added that “we are really happy with the unit economics of this business.” Kids on 45th also has an eye on sustainability, given the nature of its business, and hopes to help lessen the that are thrown into landfills each year. The company recently launched a new buy-back program that lets customers send in used clothes and receive Kids on 45th credit. Worthy said the startup will prove out its model with kids clothing before exploring other potential verticals. There are no plans to open more brick-and-mortar locations but Worthy said she’s open to the idea.
Tech leaders Gillian Muessig, Kelly Wright, Lisa Hammitt, and Jennifer Savage discuss barriers and opportunities for women in venture-backed startups. (GeekWire Photo / Monica Nickelsburg) in leadership is often cited as a driving factor behind the broader tech industry’s gender balance issues. The theory? If more women sat on corporate boards and wrote the checks, then more women would feel comfortable entering male-dominated fields and more female entrepreneurs would get funded. But even though there is a growing body of research to show that increasing women in leadership roles makes good business sense, the market is not correcting itself, at least not very quickly. That begs the question, should regulators step in? It’s a question that was raised Thursday during an event in Seattle that brought together women venture capitalists and executives to discuss opportunities and barriers in the venture capital world. Create33, under the umbrella of Madrona Venture Group, hosted the event. Create33 Director Rebecca Lovell moderated a discussion with Lisa Hammit, vice president of data and artificial intelligence at Visa; Gillian Muessig, general partner at Outlines Venture Group; Jennifer Savage, Partner at Illuminate Ventures, and Kelly Wright, board director at Amperity, Even, and Fastly. Tech leaders Rebecca Lovell, Gillian Muessig, Kelly Wright, Lisa Hammitt, and Jennifer Savage discuss barriers and opportunities for women in venture-backed startups. Reports from and the indicate that companies with at least one woman founder yield better results for venture capital firms, though when measuring by metrics like valuations. Researchers at the discovered female-founded companies generate more revenue than startups that only have men on their founding teams. In February, the (CAE) published a study asserting that women-founded companies perform at least as well as startups founded by men. But despite this track record, women-founded companies accounted for just 16 percent of first venture capital financings between 2005-2017, according to the CAE study. This year, researchers found 63 percent of startups have no women on their board of directors and 47 percent have no women in leadership. Regulators are starting to zero in on the slow progress toward gender parity across the tech industry — from startups to big public corporations. The question of whether government should regulate diversity in tech is more than theoretical in California. In September, California enacted a landmark law that requires public companies domiciled in the state to have at least one woman director by 2019 and larger corporations will need to have three women on the board by 2021. “Given all the special privileges that corporations have enjoyed for so long, it’s high time corporate boards include people who constitute more than half of the ‘persons’ in America,” former California Gov. Jerry Brown wrote in his to the California State Senate. New Jersey and Massachusetts . Legislators in Washington state, the West Coast’s other big tech hub, aren’t formally pursuing a board diversity law though that could change if the idea picks up steam. States are in a handful of European countries that require corporate boards to have women directors. A from 2016 found “evidence that firms with a larger fraction of female directors on their board have greater dividend payouts.” But the tech leaders on the Create33 panel and other female board members GeekWire interviewed have mixed feelings about regulators mandating diversity quotas. Muessig, who co-founded Moz and a venture fund that backs women-led startups, wondered if it was “thin thinking” to force this type of regulation companies. “Government does this so often,” she said. “It’s a knee-jerk reaction to something that didn’t really solve the problem. I’m not against the idea … but I haven’t dug in deeply enough to say, is that really going to be the root of the problem or not?” Flying Fish Partners co-founder Heather Redman is concerned that the narrow focus on corporate boards could actually hurt efforts to increase representation of women in other tech leadership roles. “The data, so far, on how well the regulation works is kind of mixed,” she said in an interview with GeekWire. “One of the phenomenons that I’ve noticed is that we’re already seeing a lot of women retiring early from C-suite jobs instead of becoming CEO. The board path is becoming the easier path.” Redman added, “If I had to pick where I would want to see women be, I would pick CEO all day long … the board does not have its fingers on the knobs.” Several executives expressed a begrudging acceptance of the mandate’s necessity. “Frankly, I was disappointed that it had to be mandated,” said Nicole Piasecki, a Seattle executive who sits on several board seats, including Weyerhaeuser, in an interview with GeekWire. “I understand why it was mandated because progress wasn’t occurring.” California’s law will open up 692 board seats to women by 2021, . If the rest of the nation followed California’s lead, it would amount to more than 3,000 board seats available to women, nearly a 75 percent increase. During Thursday’s panel, Wright said that California’s board law is moving the needle. The former longtime Tableau executive noted that without a legal requirement, California’s big corporations were not making much progress on gender diversity among directors. She explained that California’s law actually started as a recommendation from the government, not a mandate. “Unfortunately, over time, nothing happened,” she said. “There was no change.” From Wright’s perspective, the power of California’s law — which governs some of the most powerful tech companies in the world — is the impact it’s having beyond the state’s borders. Seattle-based Amazon, for example, added to its board in February; it now has six men and five women on . “It’s at least raised the conversation to the point where now people are actually looking at the data and looking at the facts, and we are starting to see some positive progress,” Wright said.