All parents know that raising children is expensive. Especially in those early years when they quickly outgrow clothes or toys, leaving parents in a never-ending cycle of buying new items when the old ones aren’t worn or barely used.
Enter Child, a new Chicago-based e-commerce startup that aims to give consumers greater access to discounted baby and children’s products by partnering with major brands, retailers and clearance companies for their surplus and return inventory. At the same time, he says, it can help prevent excess stock and clearance items – such as children’s clothes – from ending up in landfills, which obviously isn’t good for the environment.
Kidsy doesn’t just focus on clothes. It sells new and open box (a.k.a. new but returned) items such as strollers, car seats, toys, travel items, nursery furniture, and “other baby essentials.”
Kidsy’s founders are Indian-born former business journalist Shraysi Tandon and Turkish-born software engineer Sinan Sari, who also founded the Y Combinator-backed SaaS startup Cuboh ( a startup which was just sold to competitor ChowNow). The pair teamed up in April 2022 to launch the company, which recently closed what Tandon described as an “oversubscribed” $1 million in seed funding.
“Almost all major retailers like Amazon, Macy’s, Target, Kohl’s, Walmart, Bloomingdales don’t restock customer returns because it’s too capital and labor intensive to do so,” Tandon told TechCrunch , who is the CEO of Kidsy. . “These items are usually sent to other countries that buy liquid American goods or end up in landfills.”
Image Credits: Child
Investors were attracted by the company’s early success. Since coming out of beta in September 2023, Kidsy has been doing just that it hit $1 million in annual revenue by January – just four months later, according to Tandon.
New York-based Impellent Ventures led Kidsy’s funding, which also included participation from Hustle Fund, Everywhere VC, The Fund Midwest and Responsibly Ventures. Angel investors also put money into the round, including Initialized partners 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;
Children’s clothing: A huge market
Tandon’s path to founding Kidsy began when she started her own media production company after working as a reporter for Bloomberg TV and ABC News. Through this company, he spent three years directing an award-winning feature length documentary on child labor in global supply chains. During this time, he learned about the excess inventory that existed in the US as well as “all the supply chain issues that retailers face.”
He also learned that clearance and returns are a $761 billion industry in the US annually.
But when Tandon was pregnant with her first child, she decided to be a “smart” consumer and shop for baby products on clearance instead of paying full price. That’s when she noticed a gap in the market, asking herself, “Where’s the TJ Maxx or Burlington for all the baby and kids stuff?”
While there are plenty of clearance and overstock e-commerce companies, few specialize in just kids’ gear or are really more focused as a second-hand market for parents.
While still pregnant, Tandon started her company.
When she started raising money as a mother-to-be, Tandon said she was “nervous to constantly read statistics about how hard it was for female founders, the dominant ‘boys club’ that existed in the VC world, and also how much harder it is in general for companies growing in 2024 compared to just two years ago.”
“I didn’t want to be a statistic, so I hid my pregnancy,” Tandon told TechCrunch.
She later decided she would “never do it again,” and now tells VCs up front that she’s a mom of a baby. VCs who think that’s a problem, “are not the right investors for me,” he said.
Investors, Tandon said, were excited to back a TJ Maxx for kids, noting that the retailer it has outperformed the S&P 500 over the past 5 years and that the market for used baby and children’s products is expected to reach $12.8 billion by 2030.
“We take these items directly to our warehouse in Nebraska, inspect them, grade them and then sell them, instead of shipping or going through a third-party logistics provider,” he said.
The majority of products are brand new and unused. About 10% is gently used, which Kidsy also sells.
Baby already has tens of thousands of customers, according to Tandon. The company receives a “take rate” for each product it sells. His percentage varies depending on the brands and categories he sells, but averages 35%, according to Tandon.
Tandon knows there are many competitors selling children’s items.
But investors like David Brown, managing partner of Impellent Ventures, believe Kidsy “solves a lot of real problems for parents and breathes innovation into a stable market.”
“Yes, the offering is cheaper than others and has benefits for the environment, but the way they lean towards the evolving needs of parents is what sets Kidsy apart and will continue to do so.”
Kidsy plans to use its new capital for classic hiring development needs to expand its 12-person team by adding more partners. It also plans to incorporate artificial intelligence and machine learning into its offering “to increase operational efficiency.”
For now, the startup is focused on the US market, though Tandon believes Kidsy could expand to any country “that has lenient retail return policies and where brands are struggling to manage both their returns and excess inventory ».
