Refurbished iPhone seller Back Market hits $ 5.7 billion valuation
Back Market, an online marketplace that sells iPhones and other refurbished electronics, has raised funds that take its valuation to $ 5.7 billion, surpassing what it was worth less than a year ago, according to the company and its investors.
Founded in 2014, Back Market repairs and resells electronic products, including Apple and Samsung smartphones and tablets, MacBook, Dell and Microsoft laptops, Krups coffeemakers, and Dyson hairdryers.
The Paris-based company raised $ 510 million in its most recent fundraising round. Sprints Capital, a London-based investment firm, counts online payments firm Revolut among its other stakes in technology companies.
The new valuation of $ 5.7 billion is an almost 80% jump from the Back Market’s $ 3.2 billion level reached in May, when it raised $ 335 million. The increase underlines the heady start-up market in Europe, which was previously seen as a market also present in the tech world.
Existing investors in e-commerce operator General Atlantic have also joined the investment cycle; Eurazeo, a Paris-based private equity firm; Aglaé Ventures, the venture capital arm of luxury titan Bernard Arnault; and Generation Investment Management LLP of London.
Back Market, based in Europe, has allocated the new funds to double the size of its staff in the United States to around 100 this year and increase its total number of employees worldwide from 350 to 1,000. It entered the States -Unis in 2018 and expects to generate triple-digit annual revenue growth this year, said Thibaud Hug de Larauze, its co-founder and CEO.
Reconditioners and brands sell direct to consumers through Backmarket.com and the company earns a commission on each sale. The company does not disclose financial data.
The investment is a gamble on growing consumer demand for products that reduce e-waste and offer reduced prices, especially at a time of increasing inflationary pressures.
“The growth in sales of new electronics and the increasing pressures to divert these devices from landfills create a huge opportunity for Back Market to gain more business,” said Henrik Persson, Managing Partner of Sprints.
E-waste contains toxic additives and hazardous substances such as mercury, but only 17.4% of e-waste in 2019 was collected and recycled, according to a United Nations report released the following year.
Back Market competes with US-based platforms like Swappa and ecoATM International Ltd. But unlike some of its competitors, all of its items come directly from certified reconditioners, distributors and brands.
The defect rate for devices sold on the Back Market platform is around 4%, almost on par with the average unofficial rate for new devices, according to the company. All purchases come with a contractual warranty that allows buyers to return defective devices for a full refund.
The company hopes remanufactured electronics can replicate the used car market. Refurbished devices account for about 6% of total global annual sales of electronic products. By way of comparison, around 70% of cars purchased are second-hand, says Hug de Larauze.
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