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There's gold in them old iPhones!
An online marketplace for refurbished Apple gear and other fancy tech devices has nearly doubled its valuation in less than a year. Paris-based Back Market announced a $510 million funding round Tuesday, pegging its worth at $5.7 billion as investors bet on a second life.
In with the Old
Back Market guarantees the quality of used-and-shined-up products from resellers on its site with one year warranties and a money back for 30 days pledge. The company markets its approach as friendly to environmentally concerned tech users, who can keep old gear out of the landfill while saving cash.
While that's a reasonable business strategy, Back Market's latest valuation is a glaring 80% jump from May, when it took in $355 million and was valued at $3.2 billion. Driving the price as much as business could be overheating in the European tech sector, partly a result of Chinese government clampdowns on its own tech giants triggering a money exodus in Europe's direction:
- In the first nine months of 2021, 26 tech companies in China reached valuations above $1 billion while bringing in $45 billion in venture funding, according to venture capital firm Atomico.
- Meanwhile in Europe, there were 98 companies that obtained unicorn status, which raised $77 billion — the continent leapfrogged China to become the second-biggest creator of new billion-dollar tech companies after the US.
What's Old is New: One inspiration for Back Market is the booming used car market, where fancy bells and whistles and that new car smell are brushed aside for the bargains. While only just six percent of global annual electronic sales are of refurbished devices, 70% of all car sales are "dealer certified pre-owned." For Back Market, that means there's likely plenty of legroom to stretch out into.