Back Market, a popular online marketplace for refurbished electronic devices, has just raised $510 million in fresh funding from Sprints Capital, General Atlantic and several other prominent investors.
The Series E brings Back Market’s total valuation to a whopping $5.7 billion, which is nearly double what it was when the startup raised its $335 million Series D just seven months ago — an accomplishment that Lauren Benton, Back Market’s head of U.S. consumer and global supply operations, attributes to a massive shift in consumer behavior amid the pandemic.
“E-commerce has become more and more of a mainstream way that consumers are purchasing. Especially electronic devices,” she told Built In, adding that these consumers, especially the younger ones, have become more intentional about shopping at more environmentally conscious places. “A little bit of a shift in our behavior can really have a massive change. And I think that message has started to resonate more and more with customers, which has driven Back Market’s growth in every single country.”
Back Market does its part to encourage this kind of behavior by selling refurbished devices that are as good as new ones for a fraction of the price. And Benton says it has spent the last seven months really drilling down on that, claiming the startup has managed to reduce its average defective rate from 5 percent to about 4 percent — not bad when compared to the industry standard of 3 percent.
Back Market has also invested in its shopping experience to ensure customers use its platform again and again. Today, Benton says every device sold on the platform has an 85 percent battery, a 30-day “change-of-mind” return policy, and ships for free.
“When we compare against even some of our largest competitors and market space, we’re the only one that has all of that just as a standard package on every single grade across the board,” Benton said, adding that this will hopefully instigate a larger shift in consumer behavior going forward. “We convince more and more people to think renewed before they go out and buy new for the next [device].”
This shift is essential to society’s larger mission of being more environmentally friendly. In fact, according to Benton, electronic waste accounts for about 2 percent of our country’s municipal trash — amounting to about 70 percent of our toxins.
“Ninety percent of the CO2 emissions that will come out for one of those devices occurs in that original manufacturing,” Benton explained. “If we can delay the time period between when one of those devices is bought new and when it ends up in landfill, and if we can create a customer behavior of responsibly recycling devices — of understanding their worth, of trading them in so that they can be renewed for an extended life period — we’re then cutting back on those emissions upfront. I’m now extending that original 90 percent impact that they had, and I’m also cutting back on what’s actually ending up in our landfills.”
Now, it’s just a matter of keeping up the momentum. And, having raised more than a billion dollars in funding in just a few short years, Benton says there is a lot of “legroom” for Back Market to take its business, and the larger circular economy, even further.
“We know how to deliver an excellent experience and an excellent solution. Now is the time that we start to get really loud about it, and we start to build our brand, and our tone of voice, and create that awareness within the market,” Benton said. “We’ve barely started.”
