Across the globe, consumers of cellphones and electronic gadgetry share a common orientation: We yearn for the latest and greatest. But we settle for what we can afford.
With the price of new premium cellphones soaring past the $1,500 mark, settling increasingly involves buying used. While it might not have the allure of an iPhone 15 Pro, that $400 smartphone from 2021 will probably do just fine.
The value proposition of refurbished gadgetry hasn’t been lost on startup investors. They’ve put billions into the space over the years — pitching offerings as both a way to reduce electronic waste and serve a high-demand consumer market.
Recently, investors have been especially busy. Last week, Vienna-based Refurbed, a platform for buying refurbished cellphones and gadgets that come with guarantees, picked up $57 million in a Series C funding round.
It’s the latest in a run of good-sized financings this year for companies in the space. Per Crunchbase data, at least eight have raised multimillion-dollar rounds, with the money going to startups spanning from Sweden to São Paulo to Silicon Valley.
Looking further back, it’s evident this has been an active funding arena for several years. For a sense of who’s getting capital, we put together a list of 19 refurbished-gadget-focused companies at seed through late stage that last raised funding in the past two calendar years.
A simple pitch: reducing waste and saving money
For most companies selling refurbished goods, the pitch is pretty straightforward: Consumers can save money, while sellers can tout the positive environmental impact of keeping electrics in circulation and out of landfills. Platforms also often commonly provide a channel for people to sell their used gadgets.
On the cost front, prices are usually far lower than new, but often the merchandise skews older as well. Paris-based Back Market, for instance, says its warrantied and tested products cost up to 70% less than brand-new items. Much of the product lineup consists of models launched a few years ago that brands are no longer actively marketing.
Refurbed says its products are up to 40% cheaper than comparable new devices. And Helsinki-based Swappie, focused on the iPhone market, appears to mostly sell models a few years old for several hundred dollars.
Besides savings, sellers tout the environmental benefits of refurbished. Per Swappie, for instance, as much as 85% to 95% of carbon emissions caused by mobile phones are produced during their production — an impetus to keep them in use as long as feasible.
As they work to scale, startups are facing a seriously competitive landscape. Not only are they competing with other startups, they must also share the space with the most valuable technology companies on the planet.
Today, both Apple and Amazon operate active reseller platforms. Their impact is hefty enough that the two are facing a U.S. class-action lawsuit charging that Apple violated antitrust law through an agreement limiting the number of authorized resellers on Amazon’s marketplace. In addition, other well-established sellers with refurbished offerings include eBay and Best Buy,
If recent funding activity is any indication, however, investors appear confident that more recent entrants to the space will have not only a place in the market, but the potential for a leading role.
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