Back Market raises $120M in funding round

The global refurbished electronics marketplace Back Market, which is headquartered in Paris with its U.S. operations based in New York, has announced a funding round of $120 million from investors Goldman Sachs, Aglaé Ventures and Eurazeo Growth. These companies join Daphni in backing the company.

On Back Market, consumers purchase electronics directly from certified sellers (now numbering 1,000, according to the company) that refurbish, verify and offer a minimum 12-month warranty for all products. This emphasis on quality, as well as its use of technology to present the best value for each SKU, has allowed the company to differentiate itself from other marketplaces, Back Market says.

Back Market was founded in 2014 and established a U.S. 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, according to the company.

Back Market says it intends to invest heavily in quality control, ultimately growing its quality team up to three times its current size. Funds also will 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 in terms of sourcing devices, spare parts, test protocols, R&D, etc.

More consumers are finding value in the refurbished market, the company says, even in the U.S. where new devices traditionally have enjoyed a strong appeal. The emergence of the COVID-19 pandemic also has made the relevance of this market more obvious in that refurbished electronics can offer greater purchasing power and have the benefit of more localized supply chains that are less prone to interruption, Back Market adds.

In addition, while refurbished devices historically have been marketed primarily as a low-cost option and price remains a competitive factor, the company says the trend toward “ethical consumerism” has put Back Market in an advantageous position. The company says 64 percent of consumers are “belief-driven buyers,” seeking products and companies that support their values.

Thibaud Hug de Larauze, CEO and co-founder of Back Market, says, “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.”

Yann du Rusquec, managing director of Eurazeo Growth, says, “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.”