French tech has kicked off 2022 on a stellar note and how! It was just last week that HR tech PayFit became the first unicorn in France in 2022 and joining the unicorn club this week was Ankorstore. The scene has just got merrier as refurbished electronics marketplace Back Market closes a massive investment round of $510 million today.
This follows a $335 million Series D round in May 2021 and brings total investment to more than $1 billion since the unicorn was founded in 2014, leapfrogging from what it was worth less than a year ago. The round, which values the startup at $5.7 billion, was led by new investor, London-based investment company Sprints Capital, that counts online payments company Revolut among its other technology-company holdings. The other participants in the round included Eurazeo, Aglaé Ventures, General Atlantic and Generation Investment Management.
The Series E cements its position as a leading refurbished electronics marketplace, with over 6 million customers worldwide.
Refurbished goods, the first choice
Launched in 2014 by Thibaud Hug de Larauze, Quentin Le Brouster, and Vianney Vaute, the French startup is on a mission to grow the demand for refurbished electronics by delivering an experience superior to buying new.
Expecting to see a similar development in the electronics market in Europe as has been witnessed in the pre-owned car market in America, where consumer confidence in buying second-hand vehicles has resulted in sales that have increased twofold compared to new car sales, Back Market’s co-founder and CEO, Thibaud Hug de Larauze, said: “Our goal is to make refurbished electronics the first choice for tech purchases. The new funding together with our growing customer base, marks an important step in our journey, and more importantly, for the circular economy as a whole.”
The company, based in Paris, raised $510 million in its latest funding round. Leading the investment was Sprints Capital, a London-based investment firm that counts online payments company Revolut among its other technology-company holdings.
Towards sustainable alternative
The marketplace will use the funds to continue investing heavily in ensuring like-new product quality and delivering a world class customer experience, with the goal of expanding its global customer base.
“Renewed electronics are more affordable and are better for the environment than new electronics. Now that devices on Back Market have an average failure rate of about 4%, we are in a very attractive position as a sustainable and reliable alternative to buying new. The unofficial failure rate of new devices is currently at 3% and we are continuously improving our quality control processes to approach the same level of reliability,” said Hug de Larauze.
In its bid to establish the circular economy, it is also attempting to combat electronic waste. E-waste is the fastest growing solid-waste stream, far outpacing, by an order of magnitude, other sources such as fast fashion. It is also the most toxic. 82.6% of e-waste will not be properly recycled because today’s infrastructures simply can’t keep up with the rapid pace of over-manufacturing.
With more than 6 million customers worldwide, the startup is catalysing a fundamental shift in consumer behavior and driving the conversation around how people consume technology, one expertly renewed device at a time.
Henrik Persson, Sprints Capital’s Managing Partner: “Consumer demand for sustainable shopping is a trend that Sprints has been investing in for over a decade. By prolonging the lifetime of millions of consumer electronics devices and providing low-cost access to the best products, this platform is changing the world for the better.”
Enhanced shopping experience
In addition to quality control, the startup is also highlighting the importance of the customer shopping and buying experience. Lauren Benton, General Manager of Back Market USA said: “Taking e-commerce best practices a step further, we are offering customers a streamlined discovery experience to ensure they are immediately directed to top-performing sellers on our marketplace for any specific device they are seeking. We also offer a like-new purchasing experience with a 1-year warranty, 30-day money back guarantee and free standard shipping with every item.”
Yann Du Rusquec, Eurazeo’s Managing Partner: “As strong believers in the circular economy and supporters of Back Market’s mission to act against overconsumption, we are delighted to participate in this new fundraising. We believe a massive opportunity lies ahead of the company.”
Spreading wings in the US
To meet the US market’s rapidly growing appetite for sustainable tech, the US team is expected to more than double in size, bringing in new talent with proven expertise in product design, supply, innovation, software development, merchandising as well as award-winning creatives. The startup currently employs a team of 650 employees and counting across its 4 offices located in New York, Berlin, Paris and Bordeaux.
Chris Caulkin, General Atlantic Managing Director, Head of Technology for EMEA: “As the circular economy becomes an increasingly attractive option for consumers internationally, General Atlantic has strong conviction in Back Market’s mission to make purchasing tech hardware a more sustainable, seamless experience for customers.”
Shalini Rao, Generation Investment Management’s Growth Equity Partner said: “We are inspired by the company’s efforts to make it better for consumers to buy used electronics over new ones. We believe Back Market’s focus on this goal will set the company apart from others in the space, in addition to making sustainable consumption habits mainstream.”
The refurbished market has immense potential if the number of startups racing ahead in the sector is to be counted. Austria’s Refurbed, Forall Phones from Portugal, Denmark’s Refurb, German-based FlexRay Medical and UK-based Techbuyer are the main frontrunners in the space.