With every new smartphone and laptop our e-waste footprint is only growing, yet few of us think about buying second-hand or refurbished electronics. That could be changing, or at least that’s the hope of those behind Vienna-based startup refurbed, which on Tuesday announced it had raised $17m in Series A funding.
The funding round was led by Finnish Evli Growth Partners, and featured existing investors Klaus Hofbauer and Inventure Partners, as well as new investors Almaz Capital, Bonsai Partners, All Iron Ventures and FJ Labs.
“We believe that refurbished products have to be part of our future, and have to be a very big part,” Peter Windischhofer, refurbed’s cofounder and chief executive, tells Sifted. “It's quite obvious that we cannot live the way we lived through the last hundred years, we need to reuse stuff that we already have much more than in the past.”
Founded in 2017, refurbed is an online marketplace for refurbished electronics — phones, laptops and tablets. It saw sales grow over fivefold last year, with more than $45m in total sales. The company, which now has more than 80 employees and operates in four countries, is aiming for $100m in sales in 2020.
“We need to reuse what we already have much more, and refurbished products are the best way to do that,” Windischhofer says.
However, it’s not just about protecting the environment, it’s also good business. The products they sell, which are all fully refurbished, come with a minimum 12-month guarantee and are up to 40% cheaper than new items. The company claims to already have more than 150,000 customers throughout Europe, with operations in Austria, Germany, Poland and Italy, and plans to expand into three additional markets before the end of the year.
Secondhand goods marketplaces are having a bit of a moment, with second-hand clothing marketplace Vinted raising €128m in Series E funding late last year to become Lithuania’s first tech unicorn.
However, re-used electronics aren’t the same as second-hand clothing, given the speed at which technology moves forward.
Even so, Windischhofer believes we’ve reached a turning point of sorts, with enough people no longer chasing the latest technology offerings. “That’s something that’s changing quite a lot in the last few years. People don't see the value in these new additions that are coming out every year anymore. And that's obviously a big factor for us because our top seller is the iPhone 8, which is two and a half years old.”
Refurbed isn’t the only company taking on the challenge of selling refurbished electronics. US-based Swappa, founded in 2010, is one of the largest players on the market, and Amazon has Amazon Renewed. Meanwhile, French startup Back Market has a strong footprint in Europe and the United States.
“The current pace of new electronics consumption comes at a great human and environmental cost because of the way new devices are manufactured,” Thibaud Hug de Larauze, cofounder and chief executive of Back Market, tells Sifted.
However, he adds that there is definitely a “growing realisation that our e-waste footprint is unsustainable”.
Earlier this month, Back Market announced that it was expanding its operations into the UK. The company is already operational in France, Germany, Spain, Belgium, Italy, Austria and the United States.
The company, founded in 2014, raised $48m in Series B funding in 2018, and currently has 250 employees in offices in France and the US. It also recently announced a €15m investment in the German market, to further support its triple-digit growth in the country.
Hug de Larauze says that nine out of 10 smartphones sold today are still new. “Our ambition is to get closer to the automobile market where one new car is sold for six used ones,” he says.
Refurbed’s Windischhofer believes the size of the largely untapped market for refurbished electronics is huge. “Only in Germany you have roughly €30bn that people spend on electronics every year,” he says, estimating that the market for refurbished electronics in Europe could reach several billion in Germany and around €30-50bn across the continent in the future.
“The main issue is people don't know what refurbished products are,” he adds. “They don't know that they exist. In the UK, the US, that's completely different, but in Germany, for example, only roughly 10% know what a refurbished product is, and this is the issue that we're tackling.”
However, that’s not limiting his ambitions. Ultimately, he says, “we want to bring at least one refurbished product into every household in Europe”.
The $17m should help in that process.