When Josh Luber and his partners launched a stock market for sneakers in 2016, they had their fair share of skeptics. But the business, StockX, recently closed a $44 million Series B funding round co-led by GV, formerly Google Ventures, and Battery Ventures, and there’s talk about opening physical stores and expanding to overseas markets.
The company will use the capital to expand its international reach and increase user access worldwide. There are also plans to add and grow StockX’s authentication centers and broaden its product range. “Adding leading Silicon Valley venture capitalists GV and Battery to the investor group will provide the additional capital to take us through our next growth phase and bring the experience and knowledge of firms that have invested in many tech-based success stories,” the company said.
“We’ll be at a $1 billion run rate before Christmas,” said Luber, who started StockX with Greg Schwartz, chief operating officer, and Dan Gilbert, founder and chairman of Quicken Loans. “We’re doing over $2 million a day in daily transaction value.”
Luber said StockX’s employee count has grown from a few dozen to 400 in a little more than two years. “We’re in the middle of a hyper-growth stage. If we could find the right people we’d have 1,000 employees,” he said.
The platform is set up like the world’s stock markets with standardization for real-time pricing. “It’s a transparent, authentic, anonymous and liquid marketplace,” Luber said, noting that StockX provides in-depth market analysis, individual portfolio tracking, historical sales and volume metrics. “Sneakers and streetwear have absolutely exploded with Air Jordan, Adidas and Nike, Supreme, Bape, Palace and Kith. The business grew fivefold last holiday season. Handbags and watches are growing now that they have enough of a base.”
From four handbag brands at the category’s 2017 launch on StockX, 18 brands are now featured, including top-sellers Louis Vuitton, Goyard, Gucci and Chanel. There’s also Hermès, Dior, Balenciaga, Chloé, Celine and Fendi, among others. Popular watch brands are Rolex, Audemars Piguet and Omega.
“In our world we’re starting to see product categories merging,” Luber said, referring to luxury and streetwear. “Half the handbags we sell are men’s styles. Supreme is the leading streetwear brand and we sell as many Supreme x Louis Vuitton bags as anything else.”
The trajectory of the business has convinced Luber that StockX could eventually be viewed as a primary market. “We want to work as a retail channel,” he said. “We can start to work with retail brands and retailers to ‘IPO’ and release new products.”
Luber gave an example of Nike’s January re-release of a LeBron James retro sneaker exclusively on StockX. “It was a really big deal because it was the first time Nike re-released a sneaker. We create a sneaker box made out of wood from the championship Cleveland Cavaliers’ court and packaged it with a championship ring. We’ll have another big release after the holidays with streetwear products,” Luber said, declining to provide details.
StockX has always had the goal of moving beyond a secondary marketplace. “The Real Real is a consignment shop and others have an eBay-like model. Of the brands that we’ve talked to, everybody universally said, yes. Eventually, it’s going to happen. There will be different timelines. Some will test it. It’s a conversation we’re having with fashion brands and sneaker brands. It depends on what the goals of the company are.”
Asked whether brands will ultimately choose to control their own distribution, Luber said, “For the most part, everyone feels it’s better to have an unbiased third-party rather than the brand itself selling products because it starts to look disingenuous if the brand controls the primary and secondary markets. But I’m not naive enough to think that Nike or Louis Vuitton wouldn’t do something themselves.”
In the meantime, StockX is getting serious about brick-and-mortar. “We conceptualize about what a store would look like,” Luber said. “We 100 percent want to do physical retail. Maybe [the store] is all digital. It’s a fun project to start. We’re going to open stores in New York and Los Angeles first.”
The company will soon unveil a London operations center and is considering opening a unit there as well. “We’re expanding geographically. Europe is the highest priority for the business,” Luber said. “We’re in the middle of different levels of partnership conversations in Japan and China. It feels very much like a day zero start-up here. There’s lot of interesting opportunities.”