The sneaker resale market is hot. StockX, the self-described “stock market of things,” has secured a new round of funding and named a new chief executive. The investment firms of DST Global, General Atlantic and GGV Capital – along with investors from the previous round, such as GV and Battery Ventures – have poured an additional $110 million in Series C funding into the sneaker re-selling website, raising the value of StockX to about $1 billion.
It was described as the largest venture-capital investment ever to occur in Michigan, probably in view of the company's huge growth. After only three years in operation, the Detroit-based resale platform has reached an annual run rate of more than $1 billion in its gross-merchandise-volume (GMV).
StockX's new chief executive is Scott Cutler, who has joined the company's board of directors as well. He succeeds Josh Luber, co-founder of the company, who will continue to serve on the executive leadership team and on the board. Cutler was most recently senior vice president for the Americas at eBay, and before that spent two years as president of StubHub, another large internet marketplace – in this case, for tickets. Before that, he was executive vice president at the New York Stock Exchange, supervising about $1 trillion in capital market financing and the IPOs of such tech giants as LinkedIn, Twitter and Alibaba.
The new round of funding is intended to help StockX pursue its international expansion, especially in Europe and Asia. The company already boasts a genuinely global reach, with millions of active users in about 200 countries. It set up a European operation last October, starting in the U.K. (SGI Europe, Vol. 29, N° 31+32 of Oct. 5, 2018).
It also plans to diversify its product categories, to establish brick-and-mortar shops in key markets, and to secure exclusive “initial product offerings” for its platform from top brands, among them the Jordan brand, Nike, Yeezy, Adidas, Supreme, Kith, Off-White, Bape, Palace, Kaws, Louis Vuitton, Goyard, Gucci, Chanel, Rolex, Audemars Piguet and Omega.
StockX is an online “live bid/ask marketplace” that guarantees the legitimacy of the buyers and sellers and the merchandise. All purchased merchandise is shipped to StockX first, which authenticates it before dispatching it to the buyer and releasing the funds to the seller. The company runs four authentication centers in the U.S. and Europe, with a fifth one planned outside Amsterdam.
It was founded in Detroit in February 2016 by Josh Luber, a management consultant; Greg Schwartz, a computer engineer and StockX's current chief operations officer; and Dan Gilbert, founder and chairman of Quicken Loans and chairman of the Cleveland Cavaliers basketball team. It began as a sneaker exchange but has since expanded into streetwear, watches, handbags and, most recently, collectibles. The staff has grown to 800.
The terms of the funding round also provide for Hans Tung, a managing partner at GGV Capital, to join StockX's board of directors.
A previous Series B round of funding, worth $44 million, took place last September. It was co-led by GV (formerly Google Ventures) and Battery Ventures and included Detroit Venture Partners (DVP) and Courtside Ventures. Individual investors included the DJ Steve Aoki; the model and entrepreneur Karlie Kloss; the streetwear designer Don C; the founder, chairman and co-CEO of Salesforce, Marc Benioff; the rapper Eminem; the actor Mark Wahlberg; the founder, chairman and CEO of Monumental Sports & Entertainment, Ted Leonsis; the musician Tim Armstrong; and the entertainment agent Scooter Braun.
The launch of StockX was preceded by the birth and rise of another big American re-sale platform, Stadium Goods, which started with a store in New York in 2012, followed by the launch of its website in 2015. The company was acquired by Farfetch, the luxury goods marketplace, for $250 million at the end of last year.
The wider luxury re-sale market is estimated to be worth some $25 billion a year globally.