The Online Marketplace Valued At $3.8 Billion

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Friends,

Online sneaker, streetwear, and collectibles marketplace StockX announced a new round of funding yesterday, raising an additional $255 million at a $3.8 billion valuation.

Here are the details:

• StockX is selling $60M of new stock.

• Employees are selling $195M of their own shares to investors.

• Altimeter Capital is leading the round as an existing investor, and Dragoneer Investment Group will join the round as a new investor.

The craziest part?

This comes just 4 months after StockX raised $275 million of new capital in December, valuing the business at $2.8 billion.

After realizing the interest and activity among his kids and their friends about sneakers in 2015, Cleveland Cavaliers owner Dan Gilbert started to dig deeper into the secondary sneaker market's infrastructure.

What he found was troubling, Gilbert says:

This is where StockX comes in…

Dan Gilbert teamed up with Josh Luber, Greg Schwartz, and Chris Kaufman in February 2016 to launch StockX — a secondary marketplace for sneakers, where efficient pricing is set through free-market supply and demand.

StockX works on a bid/ask pricing system, with their team of specialists authenticating the shoes — ensuring you never receive a counterfeit pair.

In return, StockX charges two types of fees:

1. Processing Fees

2. Transaction Fees

The seller is charged a flat 3% processing fee for each sale and a transaction fee ranging from 8% to 9.5%.

In the six years since launching their product, not only has StockX expanded from sneakers into streetwear, handbags, accessories, art, electronics, and more, but the stock-market-based concept has clearly caught on with consumers.

2020 StockX Financial Overview

• Completed more than 7.5M trades

• Reached $1.8B in gross merchandise value (GMV)

• Reported more than $400M in revenue

In total, StockX has raised more than $500 million in the private markets.

Next up?

The public markets.

The Wall Street Journal reported yesterday that StockX has internally discussed a public listing for “as soon as the second half of this year,” perhaps looking to capitalize on the 35% jump in valuation they saw since December.

We could debate the current $3.8 billion valuation or the future of StockX as a publicly-traded company for hours, but ultimately, one thing is true:

StockX attacked a massive market with a passionate and growing consumer base, solving their biggest issues through a superior product with less friction. That’s why they are winning.

I’m excited to see what they’ll accomplish with an additional $255M of new capital.

Have a great weekend, and we’ll talk on Monday.

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