Back Market announced today that it has raised €276m, as it seeks to expand the global footprint of its marketplace for refurbished consumer electronics.
The company has become one of French tech's juggernauts — having raised a total of €420m on its way to a €2.6bn valuation. That includes a €100m round in May 2020, when the pandemic sent sales of used gadgets soaring.
According to CEO and cofounder Thibaud Hug de Larauze, the company has just begun to make a dent in the way consumers purchase digital devices. Even as sales continue to rise on the platform, Hug de Larauze said Back Market is still pursuing its goal of making refurbished gadgets the first choice of consumers.
"We want to scale the circular economy as fast as possible," Hug de Larauze said. "Because it just makes sense in every way for the customer who can save money. It makes more sense, ecologically speaking. And I think there is nothing more powerful than a marketplace to amplify a change."
Private equity firm General Atlantic led the round — the latest sign of how such mammoth investment funds are becoming increasingly active in the European tech scene. Investors also included Generation Investment Management, the sustainable investment fund founded by US vice president Al Gore. Previous investors Aglaé Ventures, Eurazeo, Goldman Sachs Growth Equity and daphni also joined the round.
"Back Market is very much driving a distinct category," said Generation Partner Shalini Rao. "They're really catalysing this consumer shift and creating a category in and of themselves. That ability, via sustainability, to create consumer consciousness around what other consumer electronics offerings are on the market, is really interesting."
Back Market was one of the pioneers of bringing refurbished gadgets to a wider consumer market. The company provides a marketplace for factories that take used devices and restore them to top condition. That vertical has seen growing competition from companies such as Refurbed. However, with 5m customers, Back Market has staked out a big lead.
Back Market is now operating in 13 countries, including the US where it launched more than two years ago. More recently, Back Market has entered Finland, Portugal, Ireland, and Japan. With the latest funding, the company is laying the groundwork to expand into Greece, Sweden, Slovakia and Canada in the coming months.
Part of the strategy driving Back Market's growth has been its focus on helping the 1.5k companies that sell refurbished devices on the platform to improve quality, according to Hug de Larauze. The company does that in part by sharing data from the platform that helps companies improve their offerings and has continued to reduce the defective rate of products. The search algorithm on the ecommerce site also rewards refurbishers that have higher quality ratings.
The company has also expanded its services to support refurbishers and entice more consumers to consider purchasing used devices. That includes Back Care, which handles customer service for about half of the companies on the platform. And more recently, the startup developed Back Repair, which connects customers whose products are still under warranty with local repair shops.
Handling these duties saves money for the refurbishers, which improves what are typically thin margins. But they also are aimed at improving confidence among consumers who might be wary of buying used goods.
Overcoming negative stigmas around used goods remains one of the company's biggest challenges going forward.
"Quality is king," said Hug de Larauze. "It's what's preventing people from buying used devices and refurbished products. So our job is to make these transactions safe and give them more reasons to think refurbished first."