5miles: The app trying to out-Craigslist Craigslist

Cait Freda, special to
5miles app rivals Craigslist

Spring cleaning may be a little easier this year for some mobile users, thanks to a new online and mobile marketplace with big ambitions.

With an eye toward dethroning Craigslist, 5miles helps users buy and sell goods both locally and globally. Like Craigslist, listings are free and include a range of retail items, local business services and charity donations. Originally launched in January 2015, the app is available for iPhone and Android users, and uses GPS locating to match up buyers and sellers.

In February, 5miles facilitated over $200 million in transactions, and pulled in $30 million in new funding . Since its launch, it has turned over close to $2 billion.

Since its launch, 5miles has facilitated over $200 million in transactions, according to the company, and just pulled in $30 million in new funding in February. According to a report in Techcrunch, 5miles is gunning for a valuation of at least $300 million. Meanwhile, competitor OfferUp — also dubbed a "Craigslist killer" by tech watchers — has raised more than $90 million and is estimated to have an $800 million valuation, according to The Wall Street Journal.

Unlike Craigslist, which 5miles CFO Garwin Chan told CNBC in an interview was "a product of the '90s," 5miles' mobile app is not based off anonymous information. The application creates a safe environment where users can establish a relationship and see each other's track records through customer ratings. The app expands sellers reach through the use of an in-app profile.

"We are trying to be the most innovative company focused on local marketplaces," Chan told CNBC. The company has 6 million active users as of March, and a gross value of merchandise sold of $1.3 billion.

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Image credits: Craigslist
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The app has a services option unique to 5miles, allowing users to book appointments directly through the application. Instead of having to exchange private information immediately, buyers are able to message the seller directly within the app to set up a time, location, and price. All booked appointments from the 5miles app automatically sync with the mobile calendar associated with the user's phone.

5miles is the first to integrate local services into an app of this kind. Founder and CEO of 5miles, Lucas Lu, told CNBC that he developed the concept after being scammed by sellers on other online marketplaces while in graduate school.

As an avid buyer of second-hand and vintage items, Lu wanted an online marketplace that was easy to navigate but created a trustworthy environment for users to do business.

Lu is no stranger to e-commerce. His background includes being a general manager and chief technology officer at Alibaba and LightInTheBox. Lu told CNBC he intends to create the next generation of local marketplaces that would help users grow their businesses.

"Keep following us and you'll see us bring new things to the market," he said.

In the near future, 5miles will be launching a "donate" category within the app as a way for users to contribute to local charities.

Correction: This story was updated to correct the time frame for when 5miles facilitated over $200 million in transactions.