Depicting the StockX logo in front of a sneaker collection
TRADING CARDS & COLLECTIBLES

With a Valuation of Nearly $4 Billion, StockX Wants to Go Public

Another impressive round of funding has taken the “Stock Market of Things” to new heights.

After a record-smashing year, sneakers, clothing, and collectibles marketplace StockX just completed a new round of funding which helped boost the company’s valuation by 35%. The new number? $3.8 billion.

And on the heels of all this momentum, the Wall Street Journal reports that company is expected to take itself public, perhaps before 2021 is done.

After all, it’s only fitting that the platform known as the “Stock Market of Things” would be listed on a real, live stock exchange.

Still a young company, StockX was founded in 2015 by a group that included Cleveland Cavaliers owner Dan Gilbert and collector and entrepreneur Josh Luber. Their early focus was on facilitating secondary-market sneaker auctions, but as the company has grown, so have its offerings, which now include watches, electronics, and handbags.

In fact, StockX has passed the point where it could be labeled a secondary-market platform altogether.

“StockX began as a ‘reselling marketplace,’ but the reason we’re talking about a $3.8 billion valuation and possible IPO is because it has led a convergence that was already underway: the convergence of retail and resell, of sneakers and streetwear and fashion and art, of consumer goods and culture, of collectibles and trading cards, of any product and any consumer,” Luber told Boardroom.

“When a customer buys a pair of sneakers, they do not care nor do they distinguish between retail and resell — they just want the product and are willing to pay a certain price for it.”

The company’s rapid business expansion has allowed it to reap serious benefits from a booming industry that increasingly views items like sneakers as alternative investment assets. StockX generated more than $400 million in revenue, closed 7.5 million trades, and reached $1.8 billion in gross merchandise value just in 2020 alone.

Looking back at 2015 when the platform was just getting off the ground, it’s clear that things have seriously, swiftly evolved.

“When starting any company, anyone who’s thinking about an IPO is thinking about the wrong stuff.  The goal was to launch the site. Then the goal was to get some registrations, sell some shoes, hire some great people, raise some money, and so on and so on,” Luber said. “Building a multi-billion dollar public company is still just putting one foot in front of the other. We didn’t really think about an IPO until we were raising our ‘unicorn’ [fundraising] round in early 2019.”

It makes sense that the company’s opportunities for funding expanded along with its marketplace. This week, StockX closed a $195 million secondary tendering offering led by Altimeter Capital. The successful round of funding was fueled in part by the company’s decision to allow some of their employees to sell off stock, which was gladly snatched up by hordes of interested investors.

This latest fundraising effort comes alongside an announcement of $60 million in Series E-1 primary shares. The new valuation is an impressive jump in a short period, as the company was pegged at an estimated $2.8 billion as recently as December.

“StockX is really on fire as an e-commerce platform,” Altimeter founder and CEO Brad Gerstner said via the Wall Street Journal. “By any metrics, these valuations are very reasonable when you look at their growth rate and their unit economics and their geographic and product expansion,”

In recent weeks, Topps announced its own plans for an IPO and Fanatics hinted at the same. These moves are driven by the skyrocketing collectibles and memorabilia industry, which has produced more than enough record-setting numbers over the past year to force Wall Street to take notice.

“My dreams have always been more about the process than the outcome,” Josh Luber, who left the company in September, told Boardroom. “I’m just thankful we were given the opportunity — by our customers and team members and investors and business partners — to keep building.”

Over the coming months, savvy investors will have some fun monitoring how the path to going public takes shape for all three of the aforementioned companies. But given how fast the successes have continued to come for StockX, don’t be surprised if they’re the one that crosses the IPO finish line first.

Missed StockX co-founder Josh Luber on Boardroom’s “Out of Office” podcast? Click here to listen and subscribe.

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