Back Market held a press conference on Thursday morning in Paris to talk about upcoming product launches and give an update on the company’s current situation. If you’re not familiar with the French startup, it operates a marketplace of refurbished electronics devices — mostly smartphones. It has attracted a lot of investor cash in recent years but has also been through tougher times.
In 2021, just like many large tech companies, Back Market rode the wave of zero-interest rate policies around the world and raised an enormous amount of money: a $335 million Series D round was followed by another $510 million Series E round mere months later.
After reaching a valuation of $5.7 billion, Back Market realized that the economy was slowing down. It conducted a small round of layoffs in late 2022, telling French newspaper Les Échos it was "the best way to achieve profitability in the coming years."
Fast-forward to Thursday's press conference and the company was keen to demonstrate its focus is back on product launches and new projects. Back Market said it wants to find new distribution channels and go premium so that more people think about buying a refurbished device instead of a new one.
Finding customers where they are already
Over the past 10 years, Back Market hasn’t just captured a decent chunk of the secondhand electronics market, it has expanded the market for refurbished smartphones. The pitch is simple: A refurbished device is cheaper than a new one and it’s also better for the planet. Moreover, when it comes to smartphones, it has become much harder to define why this year’s model is better than last year’s -- so why shell out lots of money buying new to get only an incremental upgrade?
The company doesn’t handle smartphones and other electronic devices directly. Instead, it partners with 1,800 companies that repair and resell old devices. So it's essentially a specialized services marketplace. Since its inception, it has sold 30 million refurbished devices to 15 million customers.
Most Back Market customers buy devices on its website or through its mobile app. But the company has recognized it's sometimes constrained by its partners’ inventory. This is why it wants to expand supply and demand with strategic partnerships.
For instance, it's partnering with Sony for PlayStation consoles. “A lot of people are coming to Back Market to try and purchase their PlayStation,” said co-founder and CEO Thibaud Hug de Larauze. But the issue is that Back Market is constrained when it comes to supplies for this type of device.