Talk about a business with strong footing.
StockX, a secondary marketplace for high-end sneakers, has raised a big new round of funding and replaced its CEO with an auction industry veteran.
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On Wednesday, StockX announced that it closed $110 million in fresh VC funding, earning the footwear marketplace a post-money valuation of over $1 billion. General Atlantic, DST Global, and GGV Capital are new investors in the company. Reuters reports that GV and Battery Ventures, which co-led StockX’s last round of funding, participated in the financing.
As part of the transaction, GGV managing partner Hans Tung will join StockX’s board.
StockX’s deal has been in the works for some time. Recode first reported on the as-yet-unfinished deal back in April.
Before this deal, the company previously socked away at least $50 million from venture investors. Its last round, a $44 million Series B, was announced in September 2018. This latest financing brings StockX’s total capital raised to $160 million, a figure confirmed by the New York Times.
The company employs over 800 people and generates gross product sales “topping $100 million per month,” according to the Times. The company is not yet profitable, but has doubled its revenue compared to last year.
As part of the financing, the company’s co-founding CEO, Josh Luber is being replaced by Scott Cutler, a former executive at eBay. Luber remains on the board and will “continue to be the company’s public face,” according to the Times.
According to a press release announcing the financing, the company said that Cutler “assumes his new role as CEO immediately.” At eBay, Cutler oversaw eBay’s business in North and South America as a senior vice president. Cutler also served stints at ticket marketplace StubHub and as an executive vice president at the New York Stock Exchange. Cutler also gets a seat on StockX’s board.
During his time at the NYSE, Cutler oversaw the IPOs of a number of major technology companies, including the likes of LinkedIn, Twitter, and Alibaba. This experience prepares him to lead StockX into a new business. Rather than simply acting as a secondary market for sneakers and streetwear, the company plans to work with brands to launch new merchandise directly in what it refers to as “initial product offerings.”
StockX is based in Detroit. And aside from recent corporate-backed equity rounds raised by new electric automaker Rivian ($700 million from Amazon in February and another $500 million from Ford in April) StockX’s Series C is the largest venture capital-backed funding round in Michigan history, according to Crunchbase data and the company’s announcement.
Venture interest in streetwear is heating up. StockX’s principal competitor, GOAT Group, was valued at approximately $550 million, post-money, following a $100 million investment by shoe shop Foot Locker. Crunchbase News covered that deal back in February.
StockX’s real time bid-ask pricing model is rather unique in the world of consumer marketplaces. It’s taking advantage of a market inefficiency, where folks buy limited-release sneakers and streetwear and summarily sell these goods for many times the MSRP. In other words, rare shoes are now an asset class all their own, and StockX is the market’s biggest exchange.
Illustration: Li-Anne Dias