It's hard not to have noticed the TV ads for Back Market, showing twins, for example, each wanting to buy a smartphone, and demonstrating that one of them has clearly made a bargain by taking a refurbished device.
The idea that changed everything
French consumer habits are changing. Whereas in the past, they were keen to buy new appliances, they are now faced with a number of different issues: these can be very costly, programmed obsolescence prevents them from considering an object as a long-term investment, and the ecological footprint of objects, which often come from abroad, leads to an interest in sustainable development. All the more reason to start a project...
How Back Market was born, based on the idea of the circular economy, and why it was so successful that it raised spectacular amounts of money in a very short space of time, is what we see here.
Containing ever more possibilities, smaller, wider screens, slimmer contours: with smartphones alone, it's obvious that every new product release comes with its share of promises. To get all this, you have to buy new, which is often expensive and bound to break down after a while, to push you to buy again.
While the French are well aware of this, many still give in to the urge to have the latest technological gadget.
Others are simply looking for devices that still work and will be less expensive.
For Thibaud Hug de Larauze, there's a market up for grabs; what we call a niche because it's little or not exploited in the entrepreneurial field: offering second-hand and reconditioned high-tech products.
To reassure purchasers, a product warranty is required (which was not the case at the time). Initially for 6 months, the service will be extended to 12 months, starting in 2019.
Together with two other entrepreneurs, Thibaud Hug de Larauze has set up a website that initially specializes in the sale of second-hand smartphones. The market is obviously promising, given the price of certain models, and based on statistics showing that 77% of people over the age of 15 in France own a smartphone.
Based on this premise, Back Market was born in 2014. The company approaches supermarkets, but also the phone brands themselves and specialists to source used phones; taking care of repairing them if the need arises. The company now works with 1,200 professional partners.
The development and consecration of Back Market
It was a great success, with sales of over 3 million euros in its first year. The principle is simple: for each sale (whatever the product purchased and its price), the start-up deducts 10%.
Back Market doesn't intend to limit itself to just smartphones, as second-hand can also involve other high-tech products.
The platform starts selling games consoles, televisions, computers and other hardware, as well as household appliances.
In 2015, sales soared to 30 million euros. But that's just the beginning, as the success story continues, peaking during the Covid-19 epidemic, with an explosion in sales on the site, particularly for so-called leisure devices.
In less than 3 years of existence, Back Market has amassed sales of 96 million euros, rising to 230 million in 2018.
Whereas in July 2019, the site counted "only" 1.5 million customers, in 2022, 5 million will be acting for the planet while preserving their wallets.
No doubt they've been impressed by the brand's sales pitch, which distills information about refurbished versus new products: with 91% fewer CO² emissions, 281 kilos of raw materials extracted and used, and almost 69,000 liters of water used for a single smartphone, it's hard not to want a second-hand product when you know the planet is already stretched to the limit.
If Back Market and its sales of reconditioned appliances appeal to French residents, the founders have no intention of limiting themselves to France and, as a future French unicorn, would like to expand internationally.
This will soon be the case with the conquest of major markets such as Germany in Europe, but also Great Britain, the United States and Japan.
All in all, Back Market is now present in 16 countries around the world and on three continents, and it's clear that the situation can only improve.
Back Market's fundraising and transformation into a unicorn
A good idea is often the basis of a successful business. But as many entrepreneurs know, it's clearly not enough to achieve the level of notoriety and sales that Back Market enjoys.
In the early days, the company was able to rely on love money (money lent or donated by friends and family). In this case, Thibaud Hug de Larauze's father, who believed in his project, even if the two men no doubt never imagined (or secretly dreamed of) such rapid business development and growth.
Family money wasn't enough, so the creator also enlisted the help of two business angels.
Given the company's dazzling momentum, the founders no longer hesitate to seek funding from so-called institutional and private investors.
After an already promising fundraising round in 2018 (48 million euros), the company managed to secure a further 110 million two years later (2020).
Why stop there, given the number of sales, but also the desire to diversify its offering to provide customers with more than just smartphones?
Last year (2021), fund-raising was again spectacular, at 76 million euros. One successful year chases another, for Back Market, which achieves the feat of raising another 450 million euros in early 2022.
Valued at over a billion euros in a very short space of time, Back Market is no longer content with being a successful company. It can now claim to be the very definition of the French Unicorn.
Does the company intend to stop there? No, a valuation of 1 billion euros is not yet in line with its ambitions, because after just 7 years in business, we're talking about more than 5 billion euros.
What's the next step? Going public, most likely. In the meantime, Back Market's profile and international development mean it has everything it takes to be part of French Tech, which it has been since this year.
A flawless ascent, taking into account "only" the aspirations of the French and the economic and ecological trends emerging at the time: the very definition of the French Unicorn; that is, a project and success that everyone dreams of; and the French method that the French Tech initiated by the Government intends to honor. For the founder, Back Market wants to be "the Apple of refurbishing". And it seems to be moving in that direction.
Back Market: key information
Number of employees to date
At the beginning of 2022, the company had just over 600 "Back Makers", spread between Paris, Bordeaux, Berlin and New York, and planned to recruit 400 new talents.
Sales figures
The company communicates very little about its sales, the most recent being that of 2018, which amounted to 230 million euros. However, Back Market's meteoric growth suggests that sales have surely doubled or even tripled in recent years.
Going public
À Back Market is not yet listed on the stock exchange. However, the French unicorn could well go public in early 2023. The company is said to have already had informal discussions with banks to prepare this operation.
Scalability
Such was its success that Back Market quickly expanded abroad. Today, in addition to France, the company is present in Germany, Great Britain, the United States and even Japan. A concept that could easily be adopted by other countries too. The platform can therefore look forward to international expansion in the years to come.
Mantra/Citation CEO
"We extend the life of products by giving them a second life. The aim is to create a reconsumption reflex in the consumer's head." Thibaud Hug.
