French refurbished device startup, Back Market generates a new funding round of $120 million from Goldman Sachs, Aglaé Ventures, and Eurazeo Development. The organization runs a store for smartphones and mobile devices that have been revamped.
Back Market doesn’t refurbish in-house appliances. These partners with accredited vendors instead, and allows them to list their products on the web. To convince the sellers and sell on the website, the startup needs a 12-month warranty.
There are now 1000 accredited vendors offering refurbished products using Back Channel. In other words, the refurbishment used to be a fragmented sector, now Back Market aggregates on a single online platform the bid now demand. It currently lives in the United States, France, Spain, Germany, Italy, Belgium, and the UK. And Österreich.
Despite today’s funding round, the company will not be spreading to a lot of new countries. Instead it will double down on core markets, beginning with the United States, the United Kingdom. And Germany. And Germany.
To control a larger chunk of the stack, the company will broaden its quality management team and add new services around refurbishments. You should think about purchasing sellers’ spare parts, implementing check protocols, etc.
Refurbished smartphones and gadgets pose significant opportunities for years to come. First, demand for new smartphones has been going down steadily for a while. Buying a brand new phone is hard to justify when your old phone is still incredibly fast and powerful.
Second, many customers have been looking for ways to reduce their impact on the environment. Although smartphone manufacturers put great emphasis on their recycling processes, an appliance used will always win against a brand new device.
Third, Samsung, Apple and other manufacturers of smartphones now sell ultra-premium models which cost a small fortune. Most simply can not afford to buy a computer that would cost more than $1,000. But the same devices would cost less on Back Market in a couple of years.