StockX, the resale platform that wants you to treat sneakers like stocks, just took on a $44 million investment. First order of business: (sneaker) world domination.
About halfway through our conversation, StockX founder Josh Luber tells me something that sounds impossible. “Three years ago, [sneaker and streetwear resellers] StockX, GOAT, Stadium Goods didn’t exist,” he says. “Now, all three of those are worth at least $150 million.” A small amount of Googling reveals that Luber’s right, somehow. Crazier still: Grailed was founded only a year earlier, took on $15 million in investment this year, and is now in the neighborhood. Up until this point, StockX, which Luber says is “considerably bigger” than the other platforms, has “only” taken on $6 million in investment. That changes today, as StockX is getting a company-changing $44 million investment. The money comes from Google’s investment arm GV and Battery Ventures, plus a couple names you might recognize, like Don C, Steve Aoki, and Karlie Kloss. (Eminem, Mark Wahlberg, and Scooter Braun are already invested.)
Luber wants StockX to be the most ambitious of all the resale platforms. The core of the company’s business is selling sneakers and streetwear, along with watches and handbags. But the grand vision for the site is to treat these goods like stocks, generating something like the true market value for an item. “MSRP [retail price] is dead,” Luber says at one point. Sneakers aren’t worth what companies want to charge—they’re worth whatever a teen with a speedy internet connection is willing to sell them for.
But Luber understands that his end goal isn’t exactly practical. “If I have to teach every 14-year-old how to use the stock market, that’s probably an uphill battle that I don’t want to fight at scale,” he says. Luber points to a series of commercials StockX rolled out. There’s no mention of the stock market idea. Instead, the message is boiled all the way down: “Here’s where you can get the shoes you want,” Luber says. He feels a little guilty about it, obscuring his desires. But while he keeps one eye on the clouds—“You have to explain things that are truly revolutionary, right?” he says—for now, he just wants to sell more sneakers and Supreme tees than the next guy. That’s where the $44 million comes in.
Luber outlines his top priorities for spending the cash. The first is global expansion. While StockX can ship anywhere in the world, it’s not set up with operations, customer service, or marketing in any place but the U.S. Now, StockX will move into Europe and Asia. The second goal is to expand on the categories StockX is already in. What sounds simple is made difficult by the way the platform operates. Each product needs its own individual page, and that requires engineers to expand StockX’s streetwear category beyond the brands it’s already selling, like Supreme, Bape, Kith, Palace, and several others. The last item on Luber’s how-to-spend-the-fat-check list: getting into new verticals. Luber throws out street art and prints, wine, action figures, and Funko toys as potential candidates.
The purpose of all this is to accomplish one larger goal: to make StockX the dominant streetwear and sneaker resale site in the world. The industry is currently flush with cash, but that won’t always be the case. “These companies tend to have winner-take-most, winner-take-all dynamics,” says Roger Lee, a general partner at new StockX investor Battery Ventures. “If you look at other marketplaces, there tends to be one or two players that win.” This plays out consistently in other industries. You want to be Facebook, not MySpace. Lee and Battery are betting on StockX because it’s already in the lead, according to Luber. Over $2 million is traded on the site daily (StockX takes a 9.5 percent transaction fee, which can drop as low as 8 percent for the most frequent sellers) and 400 people, most of whom are responsible for tasks like shipping and authenticating, are now under its employ.
The $44 million is jet fuel for StockX and Luber says the brand is ready to “to step on the gas.” “That’s certainly our goal,” Lee says when I ask if part of the reason for the investment was to push StockX to become the category leader, the winner that takes all. “That’s the whole reason we did the financing.”
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