StockX closes $275 million funding round
Practically unknown three years ago, StockX became a key player in sneaker distribution in 2020 and now has plans to expand beyond its specialty segment. The digital platform has reaped real benefits from changes in consumer behavior related to restrictions imposed during the Covid-19 pandemic. The company reported a business volume of more than $3 billion in the latest quarter and a 75% increase in its revenues, which totaled over $100 million. Led by Scott Cutler, the platform also announced that it had seen a 50% rise in transactions in the period, as well as 25 million visitors per month.
Thanks to this momentum and to wider economic prospects for the next few years, which look promising for digital businesses, StockX has inevitably attracted the attention of investors. Closed on December 16, a new round of funding should allow the sneaker resale platform to accelerate its international development and expand its offering to include new product categories. In order to achieve these objectives, StockX has received $275 million from hedge fund Tiger Global Management, which is specialized in backing e-commerce businesses.
In the past, the firm has funded the likes of Amazon, Netflix, Salesforce, Shopify, Spotify and Uber. Altimeter Capital, Sands Capital, and Whale Rock Capital Management also participated in Detroit, Michigan-based StockX's Series E funding round.
Founded in 2016, StockX closed a $110 million Series C funding round in mid-2019. This operation valued the sneakerhead-focused resale platform at over $1 billion. With a model inspired by the stock exchange, allowing users to identify the right price for the products that are on sale, the platform clearly speaks to investors, but has gained popularity above all with a fringe of young consumers.
According to the company, following its latest $275 million funding round, it is valued at $2.8 billion. This makes the platform a serious rival for a number of top sneaker and streetwear dealers. By comparison, VF Corp recently announced its acquisition of Supreme for $2.1 billion, while Foot Locker is currently valued at $4.4 billion on the New York Stock Exchange.
Such rapid growth in such a short period of time, at a company founded fewer than five years ago, could give rise to fears about a possible bubble. But the managers of StockX, which employs more than 1,000 people in 13 locations, are keen to dismiss these concerns. The platform's international development, which is supported by product certification facilities on every continent, including recently opened sites in Hong Kong and Toronto, and which led to a 260% increase in the company's sales outside of the U.S. in the third quarter, should help provide a "physical" guarantee for its model.
Furthermore, although StockX was created with the world of sneakers in mind, the platform has rapidly moved to diversify. Having previously expanded into apparel, accessories and collectors' items, the company recently added electronics, including games consoles, to its offering. And with the launch of the latest generation of consoles over the last few months, the category has already become the company's second largest. It would appear that StockX's ambition is not, therefore, to become a giant in the sneaker industry, but to test the limits of its model in other segments. And thanks to the marketing talent of its executives, investors are likely to keep lining up for their slice of the action.
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