StockX is looking to become the largest player in an increasingly crowded $25 billion resale market. The Detroit-based company, which was founded three years ago by former IBM consultant Josh Luber and Quicken Loans head Dan Gilbert, has since made its name as the NASDAQ of sneakers. The growing company – with its $2 million-plus in daily transactions – announced this week that it has raised $44 million in funding from investors, including model/entrepreneur Karlie Kloss, DJ Steve Aoki, streetwear designer Don Crawley (aka Don C), and Salesforce chairman Marc Benioff.
Luber made the announcement about the latest fundraising round – which was led by Google Ventures and Battery Ventures and brings StockX’s total funding to $50 million and is being coined as one of the largest for a Detroit-based startup – on Wednesday at Crain’s Detroit Homecoming gala.
StockX’s operations have been widely compared to the eBay marketplace. However, “Unlike eBay, selling on StockX doesn’t entail listing a product and waiting for buyers to come in and negotiate. Sellers simply enter the site, see the current market price for their shoe, and decide if they want to sell,” per Benzinga. The site also includes an authentication service, which serves to verify the authenticity of all products before they are shopped to the buyer, a critical element at a time when increasingly sophisticated counterfeit goods run rampant in the footwear industry.
The barely three-year old company got its NASDAQ-equated nickname due to the fact that prices for the products that are posted by third-party sellers on its site rise and fall by demand and supply just like the stock market. Of the sale price, StockX takes between 9.5 to 14.5 percentage, enabling the company to bring in about $700 million in revenue per year. Although, Luber said in May that the company is in a “hypergrowth” phase and that number will soon reach $1 billion.
Not only are resellers, such as StockX, gaining traction amongst consumers, they are proving to be hot items for investors and fashion conglomerates, alike. Grailed, the curated menswear re-sale site, took on a $15 million investment this June, in a Series A round led by Index Ventures, with continued participation from Thrive Capital and Simon Ventures, bringing the company’s total funding to about $20 million.
Before that, Louis Vuitton and Christian Dior’s parent company LVMH Moët Hennessy Louis Vuitton – by way of its Luxury Ventures, a vehicle to invest in small, promising fashion, cosmetics or accessories companies, took a stake in consignment sneaker store Stadium Goods. Founded in 2015 by Jed Stiller and John McPheters, the company describes itself as “a premium sneaker + streetwear marketplace selling only the most sought after footwear, apparel and other hard-to-find items on behalf of our sellers.”
In terms of more traditional luxury goods, Richemont, the Swiss conglomerate that owns Yoox Net-a-Porter, Cartier, Alaia, and Chloe, announced in June that it would acquire Watchfinder.co.uk Limited. The purchase of the platform, which enables consumers to research, buy and sell premium pre-owned watches, is the latest sign, according to analysists that luxury powerplayers are looking to tap into a fast-growing market for pre-owned products.
StockX says it will use the newly-raised funds to expand internationally, build its network of product authentication centers, and widen its product range. As for the latter, the company is already branching out from a purely sneaker platform to one that is offering up pre-owned designer bags and even Rolex watches.