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Return and repair startup Back Market has confirmed the closing of a $510 million funding round. It brings the French unicorn’s total investment to date to more than $1 billion. London-based Sprints Capital led the latest round. Funds are allocated for extensive branding and marketing campaigns designed to educate consumers about their secondhand shopping options.
Back Market is a platform for consumers to source refurbished tech items since 2014. As the pandemic hit, sales of used gadgets soared, with 2020 proving to be a turning point for Thibaud Hug de Larauze’s company. Back Market raised $100 million in May that year and has gone on to consistently raise the bar in terms of amounts secured.
Chasing a circular economy
The platform offers high-end refurbishing operations a way to reach price and environmentally savvy consumers. Everything is covered, from smartphones and tablets to games consoles and recording equipment. It taps into the burgeoning resale market that has seen companies such as Vinted and Depop experience a surge in popularity. Commonly focussed on fashion, bringing tech items into the circular economy conversation afforded Back Market a chance to stand out.
“It’s kind of a perfect storm,” CEO and co-founder Thibaud Hug de Larauze said in a statement. “We’ve been working for seven years in order to be the platform where circular electronics would be accessible and safe for everyone.”
Competition has now increased, with companies such as Vienna-based Refurbed keen to stake a claim on the sector. However, Back Market has garnered more than five million users, guaranteeing its position as a pioneer and continued leader. The refurbished tech sector is worth $5.7 billion globally. Comfortably seated, the company is now looking to do more than just align with a circular economy model. It wants to actively disrupt what Hug de Larauze calls the “linear economy”. This refers to the standard trope of buying new tech items, such as phones, directly from manufacturers including Apple.
Annual sales figures of refurbished devices are said to be between $80-$90 billion. Compared to $1.3 trillion of new sales, there is work to be done. Thibaud Hug de Larauze notes that making consumers more aware of their choices is key. Appealing to environmental concerns and/or financial astuteness, Back Market, through targeted campaigns, will let buyers know that new is not the only way to go.
“We’re going to be a bit louder on the brand side,” he said in a statement. “The brand could be everywhere. It could be in the streets. It could be on classic marketing channels. You’re going to basically encounter Back Market more often as a consumer.”
Alongside consumer-focussed informational marketing, platform improvements will be made with the latest funding. Key to this will be the expansion of the workforce, wth plans to almost triple the professional headcount. Seamless site use and increased refurbished tech vetting will be priorities.
So far in 2022, French tech startups have generated just shy of $1.5 billion in investment capital. For context, in just two weeks, the French sector has outperformed the whole of 2016.
Reuse, repair, recycle…refurb?
In 2020, Singapore’s Reebelo secured seed funding to the tune of $1.25 million. It allowed the refurbished tech interest to expand its area of operation into the wider APAC market. At the time, the company stated that the world becoming increasingly digital offered the refurbishment market scope to grow significantly. Over in the US, activists are pushing the government for their ‘Right to Repair’ as circular consumer mindsets become normalised.
All images courtesy of Unsplash.