French startup Back Market has raised a new $120 million funding round from Goldman Sachs, Aglaé Ventures and Eurazeo Growth. The company operates a marketplace for refurbished smartphones and electronics devices.
Back Market doesn’t refurbish devices in house. Instead, it partners with certified sellers and let them list their items on the site. The startup requires a 12-month warranty in order to reassure sellers and sell on the platform.
There are now 1,000 certified sellers using Back Market to sell refurbished goods. In other words, refurbishment used to be a fragmented industry and Back Market is aggregating offer and demand on a single online platform. It is currently live in the U.S., France, Spain, Germany, Italy, Belgium, the U.K. and Austria.
With today’s funding round, the startup doesn’t want to expand to a ton of new countries. Instead, it’ll double down on core markets, starting with the U.S., U.K. and Germany.
The company will expand its quality control team and introduce new services around refurbishments in order to control a bigger chunk of the stack. You can think about sourcing spare parts for sellers, introducing test protocols, etc.
Refurbished smartphones and gadgets represent a huge opportunities for the coming years. First, demand for new smartphones have been steadily going down for a while. It’s hard to justify buying a brand new phone when your existing phone is still insanely fast and capable.
Second, many consumers have been looking at ways to reduce their environmental footprint. While smartphone manufacturers greatly emphasize their recycling processes, a used device is always going to win against a brand new device.
Third, Samsung, Apple and other smartphone manufacturers now sell ultra-premium models that cost a small fortune. Many simply can't afford to buy a device that costs more than $1,000. But those same devices are going to cost less in a couple of years on Back Market.