Venture Capital: Back Market, Which Refurbishes Devices, Nabs $335M
Back Market is a French startup selling pre-owned but refurbished devices such as phones, laptops, and tablets.
Back Market, a French startup that exhorts customers to “Screw New,” sells used but fully functional consumer electronic devices on its platform. Buyers get lower prices and help save the environment from electronic waste. The startup raised $335 million in a Series D round that valued it at $3.2 billion. (Sifted)
General Atlantic led the round with other investors such as Generation Investment Management, Goldman Sachs Growth Equity, Aglaé Ventures, Eurazeo, and daphni also participating.
The company’s sales received a shot in the arm from the pandemic, which crimped budgets and forced people to consider renewed devices that came with a 12-month warranty, and offered hefty discounts on retail prices for similar but brand-new items.
CEO and co-founder Thibaud Hug de Larauze told Sifted: “We want to scale the circular economy as fast as possible. Because it just makes sense in every way for the customer who can save money. It makes more sense, ecologically speaking. And I think there is nothing more powerful than a marketplace to amplify a change.”
It appears there is a major shift in the perception of pre-owned personal items. Last week, Vinted, a European startup that runs a marketplace for used clothing and home goods, announced a raise of $303 million at a valuation of $4.5 billion, post-money. Vinted, too, got a boost from the virus, because locked-down people decluttered their homes and raised some much-needed cash in the process.
“People come to Back Market because they don’t want to spend too much or can’t afford a new device but they need it and they want it,” said Hug de Larauze to Forbes. “Refurbished is a great alternative because they’re not taking the risk of being without warranty, and without proper customer care.”
Back Market enrolls validated refurbishers for selling used devices on its platform. The refurbishers must provide after-sales service. They get ratings from buyers based on the performance of the devices and their customer support.
Refurbishers with high ratings get showcased on the platform.
Meanwhile, buyers are becoming increasingly conscious of the environment and the impact of e-waste. A consumer panel showed that 25% of Americans cite sustainability as the most compelling reason to buy refurbished electronics in 2021, up from 16% in 2019, according to the company.
Use of funds
The company will use the Series D round proceeds to further consolidate its business build on its market position. It already counts 5 million customers and 1,500 sellers on its platform.
“Our goal now goes beyond making renewed tech a viable option,” said Hug de Larauze. “We want to make it the first choice for electronics purchases.”
“Now that we are beginning to successfully eliminate the gap in quality, we are gearing up to go toe-to-toe with the $1.5 trillion new device market,” he added.
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