Back Market – Founders, Business & Revenue Model, Funding

Back Market is a French startup that operates a marketplace for refurbished electronics. The company was founded in 2014 by Thibaud Hug de Larauze, Quentin Le Brouster, and Vianney Vaute. Back Market connects consumers with professional refurbishers around the world, allowing them to buy high-quality, gently used electronics at a fraction of the cost of new.

Back Market currently operates in 16 countries, including France, the United States, the United Kingdom, Germany, and Japan. The company has raised over $1 billion in funding, and is valued at $5.7 billion.

Back Market’s mission is to make it easy and sustainable to buy refurbished electronics. The company believes that refurbished electronics are a great way to save money, reduce waste, and extend the life of electronics.

Back Market offers a wide variety of refurbished electronics, including smartphones, laptops, tablets, TVs, and appliances. The company also offers a variety of services, such as free shipping, a 1-year warranty, and a 30-day money-back guarantee.

Back Market has been praised for its commitment to sustainability. The company has a number of initiatives in place to reduce its environmental impact, such as using recycled packaging and donating refurbished electronics to charity.

Back Market is a leading player in the refurbished electronics market. The company is well-positioned for growth, as more and more consumers are looking for sustainable ways to buy electronics.

Here are some of the key features of Back Market:

• Wide selection of refurbished electronics
• Competitive prices
• Free shipping
• 1-year warranty
• 30-day money-back guarantee
• Commitment to sustainability

If you are looking for a sustainable way to buy electronics, Back Market is a great option. The company offers a wide selection of refurbished electronics at competitive prices. Back Market also offers a variety of services, such as free shipping, a 1-year warranty, and a 30-day money-back guarantee.

Founding History of Back Market

Back Market was founded by Thibaud Hug de Larauze, Quentin Le Brouster, and Vianney Vaute. These three entrepreneurs shared a vision of creating a platform that could address two major challenges in the consumer electronics industry: electronic waste and the high cost of new tech products.

Inception and Early Days

The idea for Back Market began to take shape in 2014. Thibaud Hug de Larauze and Quentin Le Brouster, both veterans of the e-commerce industry, observed a significant gap in the market for refurbished electronic devices. They noticed that consumers were often hesitant to buy used products due to concerns about quality and reliability. Simultaneously, they saw a considerable amount of electronic waste piling up, as people frequently discarded their old devices.

The Concept

To bridge this gap and solve these environmental and economic issues, Thibaud, Quentin, and Vianney formulated the concept of Back Market. They envisioned a curated online marketplace where certified refurbished electronic products would be available to consumers at affordable prices, while also promoting sustainability by reducing electronic waste.

Official Launch

Back Market was officially launched in November 2014 in France. The founders strategically chose the French market as their starting point due to their familiarity with the region and the favorable e-commerce landscape in the country.

Early Challenges

In the beginning, Back Market faced its fair share of challenges. Overcoming the stigma associated with refurbished products was a significant obstacle. Consumers were skeptical about the quality and reliability of these products, so the founders had to work hard to build trust in the brand and its offerings. They tackled this issue by ensuring that all products sold on the platform underwent strict quality testing and were certified by reputable refurbishers.

Expansion and Funding

Despite the challenges, Back Market gained traction quickly. As demand grew, the company expanded its product categories beyond smartphones and laptops to include a wide range of electronics such as tablets, gaming consoles, cameras, and more. The success of the platform also caught the attention of investors.

In 2015, Back Market secured its first round of funding, raising $2.8 million from investors including Daphni, Aglaé Ventures, and others. This injection of capital allowed the company to enhance its platform, expand its operations, and reach a broader audience.

International Growth

Having established a strong presence in the French market, Back Market set its sights on international expansion. In 2017, the company launched its platform in Germany and soon expanded to other European countries, such as Spain and Italy. The company continued to attract investors, raising $7 million in a funding round led by Groupe Arnault in 2018.

Further Expansion and Recognition

As Back Market continued to grow, it gained recognition for its innovative approach and commitment to sustainability. The company expanded its reach beyond Europe, entering the US market in 2018, and subsequently launched in other countries, including Canada.

By 2021, Back Market had become one of the leading online marketplaces for refurbished tech products globally, with a presence in multiple countries and a substantial customer base.

Business Model of Back Market

Back Market operates on a unique business model that revolves around sustainability, trust, and providing a platform for certified refurbished electronic products. Let’s delve into the details of Back Market’s business model:

Refurbished Marketplace: Back Market is an online marketplace that brings together professional refurbishers and consumers. It acts as an intermediary platform where certified refurbishers can list their refurbished electronics, and consumers can browse and purchase these products directly from the sellers.

Certified Refurbishers: Back Market partners with professional refurbishers who are carefully vetted and meet strict quality standards. These refurbishers take pre-owned electronic devices, such as smartphones, laptops, tablets, and more, and put them through a comprehensive refurbishment process. This process involves testing, repairing, and thoroughly inspecting each product to ensure it meets like-new standards.

Curated Product Selection: Back Market focuses on offering a curated selection of products to its customers. This means that only high-quality, certified refurbished devices are listed on the platform. By maintaining a rigorous selection process, Back Market aims to eliminate the risks associated with purchasing refurbished electronics and build trust with consumers.

Diverse Product Categories: Back Market offers a wide range of electronic product categories, including smartphones, laptops, tablets, cameras, gaming consoles, and other tech gadgets. This diversity allows the platform to cater to various customer needs and preferences.

Value Proposition for Consumers:

• Affordable Prices: Back Market’s main value proposition is providing consumers with access to top-notch refurbished products at significantly lower prices than their brand-new counterparts. This makes premium brands and models more accessible to a broader audience.
• Quality Assurance: Through its partnership with certified refurbishers, Back Market ensures that each product undergoes a thorough testing process. This quality assurance gives consumers confidence in their purchases, reducing the risk of receiving faulty or subpar items.
• Warranty and Customer Support: Back Market offers warranties on all products to further boost consumer confidence. Additionally, they provide customer support to assist with any issues that may arise during the purchasing process or the use of the products.

Eco-Friendly Approach: Back Market’s business model emphasizes sustainability and environmental consciousness. By promoting the purchase of refurbished electronics, the company aims to reduce electronic waste and extend the lifecycle of electronic devices, thereby contributing to a more sustainable consumption pattern.

Partnerships with Brands and Retailers: Back Market collaborates with major brands and retailers to offer their certified refurbished products on the platform. This allows brands to extend the lifespan of their products and tap into the growing demand for sustainable options.

Back Market’s innovative business model addresses both consumer concerns about refurbished products and environmental challenges posed by electronic waste. By establishing trust through quality assurance and promoting affordability, Back Market has carved out a unique space in the e-commerce industry, contributing to a more sustainable and conscious consumer electronics market.

Revenue Streams and Potential Revenue Streams of Back Market

Back Market generates revenue through several key revenue streams that are essential to its business model. Let’s explore these revenue streams in detail:

Commission on Sales: Back Market operates as a marketplace, connecting certified refurbishers with consumers. When a product is sold on the platform, Back Market earns revenue by taking a percentage of the transaction value as its commission. This commission model incentivizes the company to promote and facilitate sales of refurbished products on its platform. The commission rate may vary depending on the product category or the agreement with the refurbisher.

Seller Fees: In addition to the commission, Back Market may charge refurbishers a listing fee or other seller-related fees. These fees contribute to the company’s revenue and help cover the costs associated with maintaining the platform, customer support, and quality control measures.

Premium Placement and Advertising: Similar to other e-commerce platforms, Back Market may offer premium placement and advertising options to sellers. Sellers can pay for increased visibility for their products on the platform, such as featuring their products on the homepage or at the top of search results. This advertising revenue stream allows sellers to boost their products’ visibility, while it provides an additional income stream for Back Market.

Warranty and Service Plans: Back Market provides warranties on all the refurbished products sold on its platform. These warranties may cover different periods, ranging from a few months to a year or more, depending on the product and refurbisher. In some cases, Back Market may offer extended warranty or service plans to consumers for an additional fee. Revenue from these warranty and service plans contributes to the company’s overall earnings.

B2B and Bulk Sales: In addition to individual consumer sales, Back Market may engage in business-to-business (B2B) sales, where companies or retailers purchase refurbished products in bulk for resale or internal use. B2B sales can be a significant revenue source for the platform, especially when partnering with retailers or other e-commerce businesses.

Affiliate Partnerships: Back Market might have affiliate partnerships with other companies or websites. When a user clicks on a link or makes a purchase through these affiliate partnerships, Back Market may earn a commission or referral fee.

Valuation, Funding and Investors of Back Market

Here is an explanation of the valuation, funding, and investors of Back Market:

Valuation: Back Market is currently valued at $5.7 billion. This valuation was achieved after the company raised $510 million in Series E funding in January 2022.

Funding: Back Market has raised a total of $1.02 billion in funding over 5 rounds. The company’s most recent funding round was a Series E round in January 2022, led by Sprints Capital. Other investors in Back Market include Eurazeo, Generation Investment Management, and Quadrille Capital.

• Series A: In 2018, Back Market raised $7 million in Series A funding from investors Eurazeo, Aglaé Ventures, and Daphni.
• Series B: In 2018, Back Market raised $48 million in Series B funding led by Groupe Arnault, the umbrella company of Bernard Arnault, which is the majority shareholder of Christian Dior and LVMH. The round also included previous investors Eurazeo, Aglaé Ventures, and Daphni.
• Series C: In 2020, Back Market raised $120 million in Series C funding from Goldman Sachs, Aglaé Ventures and Eurazeo Growth.
• Series D: In 2021, Back Market raised $335 million in Series D funding led by General Atlantic at a valuation of $3.2 billion.
• Series E: In 2022, Back Market raised $510 million Series E round, which valued the company at $5.7 billion. The round was led by Sprints Capital, with existing investors also participating, such as Eurazeo, Aglaé Ventures, General Atlantic and Generation Investment Management.

Investors: Back Market’s investors include a number of leading venture capital firms, such as Eurazeo, Generation Investment Management, and Quadrille Capital. The company also has a number of strategic investors, such as Sprints Capital and Cdiscount.

Back Market’s valuation, funding, and investors are all indicative of the company’s strong growth and potential. The company is well-positioned to continue to grow in the future, as more and more consumers become aware of the benefits of buying refurbished electronics.

Here is a table summarizing Back Market’s valuation, funding, and investors: