Electronics online platform Back Market raises €110 million

Hamburg, Germany —
Back­Mar­ket
, the world’s leading online plat­form for used and refur­bis­hed elec­tro­nic products, has raised €110 million in a Series C finan­cing round. Inves­tors are Gold­man Sachs, Aglaé Ventures (the venture arm of Groupe Arnault) and Eura­zeo Growth. Among other things, the French fair­tech startup intends to use the fresh capi­tal to conso­li­date its role in Germany and expand its inter­na­tio­nal market leader posi­tion in the DACH market as well. Previously, Back Market had successfully comple­ted two rounds of finan­cing tota­ling €48 million from Aglaé Ventures, Eura­zeo Growth and Daphni.

Expan­sion in the DACH market: Focus on Germany
Back Market laun­ched in France more than five years ago as the first online market­place to focus exclu­si­vely on used and rema­nu­fac­tu­red elec­tro­nics and elec­tri­cal appli­ances (“refur­bis­hed”). In the mean­time, the green tech pioneer is active with its inno­va­tive busi­ness model in seven other count­ries (Germany, Austria, Italy, Spain, the United King­dom, Belgium and the United States). In the DACH market, Back Market has been opera­ting in Germany since 2016 and now also in Austria since the begin­ning of 2020. Plans are in place to open an office in Germany this year to acce­le­rate expan­sion here. Expan­sion into neigh­bor­ing Austria is also to be mana­ged from Germany. Invest­ments are incre­asingly being made in the areas of busi­ness deve­lo­p­ment, marke­ting and new talent.

“The finan­cing is a defi­ni­tive signal of matu­rity, not only for Back Market, but also for the rapidly growing refur­bis­hed indus­try,” commen­ted Thibaud Hug de Larauze, CEO and co-foun­­der of Back Market. “We have crea­ted a global brand and estab­lished a name that is not only synony­mous with ‘refur­bis­hed,’ but also with ‘quality. The task now is to anchor this para­ble even more firmly in the DACH region. Germany is a key market for us: the German market is one of the most dyna­mic markets in terms of e‑commerce and at the same time shows a strong envi­ron­men­tal aware­ness among consumers.”

Back Market’s mission: reduce e‑waste and CO2 worldwide
“Inves­tors have reco­gni­zed the shift curr­ently taking place towards ‘ethi­cal consump­tion’ and Back Market’s unique posi­tion in the market,” Hug de Larauze conti­nues. “Our mission is to achieve a funda­men­tal shift in mind­set among consu­mers and coun­ter­act the trend of constantly buying new electronics.”

To that end, the fair-tech startup offers value for money, with discounts of 30 to 70 percent off the price of new, while crea­ting an easy-to-use means of comba­ting the unfol­ding “e‑waste” crisis. Globally, over 44 million tons of elec­tro­nic waste was produ­ced in 2016, with an annual growth rate of 3–4%. That number is expec­ted to grow to 52.2 million tons by next year.

Giving “refur­bis­hed” a good name: Back Market focu­ses on quality
Another large part of the invest­ment sum is to flow into quality control: With the help of the addi­tio­nal finan­cial resour­ces, Back Market intends to triple the team size in this segment. In addi­tion, the startup wants to improve its own algo­rithm with a machine lear­ning unit, intro­duce new services around logi­stics and repair, and expand its own exper­tise in terms of rema­nu­fac­tu­ring (procu­re­ment of equip­ment, spare parts, test proto­cols, R&D, etc.) for the bene­fit of its sellers.

Back Market alre­ady works with more than 1,000 certi­fied part­ner work­shops that inspect and refur­bish used equip­ment before it goes into resale. As a sign of confi­dence in quality control, Back Market in Germany and Austria equips all products with a 36-month warranty. This offers consu­mers a safe and attrac­tive alter­na­tive to buying new.

Alex­andre Flavier, Inves­tor Gold­man Sachs Growth: “Back Market is a prime exam­ple of our stra­tegy to support visio­nary entre­pre­neurs in deve­lo­ping alter­na­tive models for the world of tomor­row. We are very exci­ted to be working with Thibaud and his talen­ted team. They can play an important role in the circu­lar economy and be a mile­stone on the road to more sustainable growth. We look forward to provi­ding Back Market with the best possi­ble support during this phase and as they expand internationally.”

Antoine Loison, co-foun­­der and gene­ral part­ner of Aglaé Ventures, said, “Aglaé Ventures is proud to be an early inves­tor in Back Market. We look forward to support­ing its foun­ders for the long term and contri­bu­ting to the deve­lo­p­ment of a gree­ner envi­ron­ment for buying and selling elec­tro­nic products.”

Yann du Rusquec, Mana­ging Direc­tor Eura­zeo Growth: “The current Corona crisis proves the incre­di­ble resi­li­ence of Back Market’s model. The combi­na­tion of good value for money, stable local supply chains and a strong sustaina­bi­lity mission enables the company to respond to consu­mer needs even in these chal­len­ging times. Need­less to say, Back Market is curr­ently performing extre­mely well.”

Curr­ently present in eight count­ries (France, Germany, Italy, Spain, United King­dom, Austria, Belgium and United States), the company now employs around 280 people in Paris, Bordeaux and New York.

About the Merchant Banking divi­sion of Gold­man Sachs
Foun­ded in 1869, Gold­man Sachs Group, Inc. is a global leader in invest­ment banking, secu­ri­ties and invest­ment manage­ment. The Gold­man Sachs Merchant Banking Divi­sion (MBD) is the primary center for the firm’s long-term prin­ci­pal invest­ment acti­vi­ties. MBD is one of the world’s leading private equity inves­tors, with invest­ments in private equity, growth equity, infra­struc­ture, private debt and real estate.

About Groupe Arnault
Groupe Arnault is the family holding company of Bernard Arnault, the main share­hol­der of the LVMH Group. Groupe Arnault has been inves­t­ing in compa­nies with a strong tech­no­lo­gi­cal focus for more than 20 years and has been instru­men­tal in helping them grow into some of the world’s leading compa­nies. Follo­wing its initial invest­ment through Aglaé Ventures, its early-stage invest­ment program, Groupe Arnault is incre­asing its invest­ment during this third round of financing.

About Eura­zeo
With a diver­si­fied port­fo­lio of appro­xi­m­ately €16 billion in assets under manage­ment, inclu­ding €10 billion from third parties, Eura­zeo is a leading global invest­ment firm with offices in Paris, Luxem­bourg, New York, Shang­hai and Sao Paulo. Its mission is to iden­tify, acce­le­rate and improve the trans­for­ma­tion poten­tial of the compa­nies in which it invests. As a global long-term share­hol­der, the firm provi­des the compa­nies it serves with deep indus­try exper­tise, a gate­way to global markets, and a stable foot­hold for trans­for­ma­tio­nal growth.

About Daphni
Daphni is a Euro­pean VC firm inves­t­ing in user-centric start­ups with Euro­pean DNA and strong inter­na­tio­nal ambi­ti­ons. The company is supported by daphni­po­lis, a tight-knit commu­nity of more than 300 entre­pre­neurs, execu­ti­ves, acade­mics, artists and consul­tants, and a digi­tal plat­form to ensure both effi­ci­ency and full trans­pa­rency. The company was foun­ded in 2015 and is based in Paris, France.