Back Market hits $5.7 billion valuation for its refurbished device market – TechCrunch

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french startup Back Market raised another mega round of funding. In May, the company raised a $335 million Series D round. Today, the company is announcing a $510 million Series E funding round, which values ​​the company at $5.7 billion.

If you’re unfamiliar with Back Market, the company operates a marketplace for refurbished electronics, primarily smartphones. In other words, if you think smartphones are expensive, you can get a phone that’s still in good condition without paying top dollar.

There are many reasons why consumers might buy a phone from Back Market instead of buying a new phone from a carrier or smartphone manufacturer. In addition to saving money, many customers believe that new phones only offer incremental updates over previous generation models.

Many customers also want to avoid generating additional waste and choose a used device for this reason. Many old smartphones just end up in a drawer after all. A new battery and sometimes a new screen can be enough to turn an old device into an attractive refurbished phone.

Back Market does not directly refurbish devices. Instead, third-party companies act as supply partners for Back Market. By listing their inventory on the Back Market marketplace, they find customers more easily.

At the other end of the deal, customers purchase devices through Back Market, as there is a 30-day money-back guarantee. A total of 6 million customers have purchased a device from Back Market.

Sprints Capital is leading today’s funding round, which is also joined by existing investors, such as Eurazeo, Aglaé Ventures, General Atlantic and Generation Investment Management. The French tech ecosystem is on the rise since PayFit, Qonto and Ankorstore have also announced that they have raised hundreds of millions of euros each in recent days.

“Our goal is to make refurbished electronics the first choice for technology purchases. We expect to see a similar development in the electronics market as we have seen in the automotive market. second-hand in America, where consumer confidence in buying used vehicles has driven sales that have doubled compared to new car sales,” co-founder and CEO Thibaud Hug de Larauze said in a statement. The support and trust of these funds, along with our growing customer base, mark an important milestone in Back Market’s journey, and more importantly, for the circular economy as a whole.”

A particularly important metric for Back Market is the average failure rate. Right now, the company estimates that it has a failure rate of around 4%, which means that one in 25 phones doesn’t perform as expected in one way or another. This is why customer service is essential when it comes to customer satisfaction. The company also estimates that new devices have a 3% failure rate.

The startup plans to double in size with a particular focus on the US market — it currently has 650 employees. Back Market is present in 16 countries, including many European markets, the United States and Japan.

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