Urban Culture Helps Sneaker Exchange StockX Reach $1 Billion Valuation
By CultureBanx Team
StockX raised $110M in its latest funding round
Hip hop artists are the tastemakers of the sneaker industry
Sneaker reselling is big business as StockX has turned resales into a kind of currency through its online marketplace. Urban culture has always had an epochal influence on the sneaker industry which helped the company raise $110 million, now valued at $1 billion. Ever since Run-D.M.C. waived their shell toe Adidas (ADDYY -1.58%), these coveted consumer goods have become tradable commodities with “sneakerheads” around the world regarding them as investment assets.
Why This Matters: Supply and demand is the name of the game for sneaker aficionados. Hip hop loves to talk about their limited sneakers, creating market envy and a reason for platforms like StockX to exist. Case in point Run-D.M.C. signed a $1 million endorsement deal with Adidas back in 1986, they ended up generating sales of more than $100 million over the next four years, their shoes weren’t even limited editions.
Sneakers by rappers like Kanye West, Drake and Pharrell with companies including Nike (NKE -1.02%) and Adidas have created a frenzy on StockX as they dictate business and trends, that have basically usurped athletes as the go-to tastemakers in the industry. Hip hop artists have gone from subtle co-signers who helped start grassroots movements to indirect ad men, to power brokers.
StockX said its revenue more than doubled in the last year, with gross product sales topping $100 million a month, a number that’s likely to go up. Especially when you consider the market for resale sneakers and streetwear in North America is projected to reach $6 billion by 2025, according to Cowen. In total, StockX has raised $160 million, thanks to sneakerheads along with its strong commission strategy ranging between 9% and 14%.
What’s Next: The company plans to use its new capital injection to expand internationally, particularly in Europe and Asia. They will also push into selling newly released products like collectible toys and luxury handbags.
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