NEW YORK, May 5, 2020 - Back Market (www.backmarket.com), the premier global refurbished electronics marketplace, has announced a funding round of $120 million from investors Goldman Sachs, Aglaé Ventures, and Eurazeo Growth, joining Daphni as backers of the Company, continuing to tap into an $80 billion-plus opportunity by selling refurbished electronic devices and appliances (smartphones, tablets, laptops, and other products) directly to increasingly eager consumers.
Giving refurbished a good name: Back Market leads the way as the emerging champion of the refurbished electronics industry.
On Back Market, consumers purchase electronics directly from certified sellers (now numbering 1,000 and growing) that refurbish, verify and offer a minimum 12-month warranty for all products to meet the high standards of Back Market’s Quality Charter. This emphasis on quality, as well as its use of technology to present only the best value for each SKU has allowed the company to differentiate itself from other marketplaces as a trustworthy and simple way to buy refurbished electronics. This provides consumers a safe and appealing alternative to buying new, ultimately helping to temper the pace of new device consumption.
Back Market was founded in 2014 and established a US presence in 2018. The company also operates in France, Spain, Germany, Italy, Belgium and most recently, the United Kingdom and Austria. While Back Market intends to continue its expansion worldwide, the injected funds will be used to continue strengthening its position in existing markets with a core focus on the United States, United Kingdom and Germany.
The company intends to invest heavily in quality control, ultimately growing its quality team up to three times its current size. Funds will also be allocated to activities that solidify Back Market’s industry leadership: building a dedicated Machine Learning team to improve its algorithm, introducing new services around logistics and repair, as well as expanding on Back Market’s expertise to benefit its sellers (sourcing devices, spare parts, test protocols, R&D, etc.)
A changing world means a changing market.
More and more consumers are finding value in the refurbished market, even in the US where new devices have traditionally enjoyed a strong appeal. The emergence of the Covid-19 crisis has made the relevance of this market even more obvious. Refurbished electronics offer greater purchasing power, and have the benefit of more localized supply chains that are less prone to interruption.
In addition, while refurbished devices have historically been marketed primarily as a low-cost option and price remains a competitive factor, trends towards “ethical consumerism” put Back Market, as a participant in the circular economy, in a particularly advantageous position. 64% of consumers are now “belief-driven buyers”, seeking out products and companies that support their values, becoming more sensitive to the environmental and social impact of the products they choose to purchase.
Investors have taken notice of this change and of Back Market’s unique position in the market. Back Market’s mission is to take advantage of the evolving landscape to carve a permanent place for itself as a leader in the electronics market as a whole, providing consumers with great value for money while also creating an easy to adopt means of combating the unfolding electronic waste (“e-waste”) crisis. Worldwide, over 44 million tons of electronic waste was produced in 2016 with an annual growth rate of 3-4%. That number is projected to grow to 52.2 MT by next year. Within the United States, e-waste is both the fastest growing and most toxic waste stream. Only 19 states have laws that ban electronics from being disposed of with regular trash.
Thibaud Hug de Larauze, CEO and co-founder, Back Market: This fundraising is a signal of maturity, not only for Back Market, but also for the rapidly expanding refurbished industry. We have created a global brand and established a name that is not only synonymous with ‘refurbished’ but also with ‘quality’. With this round of funding, we are optimistic that we can reinforce our leadership in this market and have a lasting positive impact on consumers’ perceptions about refurbished devices.
Alexandre Flavier, Investor, Goldman Sachs Growth: Back Market has a clear mission to build a category leader in the circular economy, supporting the world’s transition to more sustainable consumption. We are very excited to partner with Thibaud and his exceptionally talented team as they continue to execute on their ambitious growth plans and expand into new markets.
Antoine Loison, Co-founder, Aglaé Ventures: Aglaé Ventures is proud to be an early shareholder of Back Market. We are excited to back its founders over the long run and contribute to the development of a more eco-friendly environment to buy and sell electronic products.
Yann du Rusquec, Managing Director, Eurazeo Growth: The current crisis proves the incredible resiliency of Back Market’s model which, in combining value for money, stable local supply chains, and a strong sustainability mission, has allowed it to respond to consumers’ needs even through the surge brought on by these trying times. Needless to say, the company’s performance is extremely healthy right now.
About Back Market
Launched in 2014 by Thibaud Hug de Larauze, Quentin Le Brouster, and Vianney Vaute, Back Market is the first marketplace focused on bringing thousands of refurbished electronic devices and appliances from certified professional sellers to consumers. The company currently operates in 8 countries (The United States, France, Germany, Italy, Spain, Belgium, and recently, the United Kingdom and Austria). It employs a team of about 280 employees across its 3 offices located in Paris, Bordeaux, and New York.
About Goldman Sachs Merchant Banking Division.
Founded in 1869, The Goldman Sachs Group, Inc. is a leading global investment banking, securities, and investment management firm. Goldman Sachs Merchant Banking Division (MBD) is the primary center for the firm’s long-term principal investing activity. MBD is one of the leading private capital investors in the world with investments across private equity, growth equity, infrastructure, private debt, and real estate.
About Aglaé Ventures
Aglaé Ventures is an international venture capital firm based in Paris, New York and San Francisco backed by Groupe Arnault, the controlling shareholder of LVMH.
Aglaé Ventures invests from € 100K up to € 100MM in activities and fast-growing technology companies at all stages.
Over the past 20 years, Aglaé and its affiliates have backed some of the most iconic global technology companies including Netflix, Slack, Spotify, Airbnb and many others.
With a diversified portfolio of approximately €16 billion in assets under management, including €10 billion from third parties, Eurazeo is a leading global investment company with offices in Paris, Luxembourg, New York, Shanghai, and Sao Paulo. Its mission is to identify, accelerate and enhance the transformation potential of the companies in which it invests. As a global long-term shareholder, the firm offers deep sector expertise, a gateway to global markets, and a stable foothold for transformational growth to the companies it supports.
Daphni is a European VC firm that invests in user-oriented startups with European DNA and strong international ambitions. The company is supported by the daphnipolis, a closely-knit community of 300+ entrepreneurs, executives, academics, artists and advisors, and a digital platform to ensure both efficiency and full transparency. The firm was established in 2015 and is based in Paris, France.