Dive Brief:

• ThredUp's side gig, a resale platform called RaaS, or "resale as a service," has expanded its client list by over 30% in the last year, could grow from about 30 now to more than 200 in the next five years, and could ultimately sign up more than 300, according to research this week from Wells Fargo.

• ThredUp collects monthly fees from Raas clients as well as a portion of their sales. That revenue could grow from $2 million this year to more than $300 million by 2025, and approach $925 million four years after that, per the report.

• The resale site's 30 or so partners include Madewell, Walmart, Everlane, eBay, Farfetch and Gap, "most recently adding their most impressive brand partner, adidas," Wells Fargo analysts led by Ike Boruchow said.

Dive Insight:

E-commerce is rife with logistical complexities and costs. One way to supplement revenues from online sales of products to consumers is to develop services and tech useful to other retailers.

Amazon has demonstrated how lucrative that can be. Sales from its high-powered AWS cloud unit (and, to a lesser but growing extent), from its advertising, fulfillment and other services for marketplace sellers consistently outpace its retail sales.

Even e-retailers like Stitch Fix that boast of their digital superiority haven't leveraged their tech operations in this way. But ThredUp for the past couple of years has taken that tack, and Wells Fargo sees a lot of potential. Those analysts calculated robust margins — often elusive in e-commerce — via ThredUp's RaaS platform, estimating EBITDA of more than $50 million in 2025 and more than $400 million by 2029.

"[W]hile the sole focus from investors continues to be on the managed marketplace, today's report takes a deep-dive look at the highly underappreciated RaaS model that the company has slowly been ramping up," Boruchow wrote.

ThredUP's RaaS service is a win-win for the company and its clients, and bolstering the analysts' thesis is the booming resale market itself, which they see as "the next big 'disruptor' to the retail industry (following recent disruptions from e-commerce and off-price)."

The company's recent acquisition of European retail platform Remix is also an advantage, in light of predictions that the European secondhand market is set to double by 2025, driving the combined U.S. and European resale market to some $68 billion in 2025, according to Wells Fargo.