By CultureBanx Team
- StockX seeking a $2.5B valuation in a new round of private funding
- Sneakers by rappers like Kanye West, Drake and Pharrell with companies including Nike and Adidas have created a frenzy on StockX
Sneaker reselling is big business as StockX has turned resales into a kind of currency through its online marketplace, as it seeks a $2.5 billion valuation in a new round of private funding. Urban culture has always had an epochal influence on sneakers, which should help the company raise the reported $250 million it’s seeking. Since hip-hop loves to talk about their limited edition sneakers, it’s helped to create market envy and a reason for platforms like StockX to exist.
Why This Matters: Supply and demand is the name of the game for sneaker aficionados. Sneakers by rappers like Kanye West, Drake and Pharrell with companies including Nike (NKE -0.38%) and Adidas (ADDYY -1.61%) have created a frenzy on StockX as they dictate business and trends. They have basically usurped athletes as the go-to tastemakers in the sneaker industry. Hip hop artists have gone from subtle co-signers who helped start grassroots movements, to indirect ad men, to power brokers.
The market for resale sneakers and streetwear in North America is projected to reach $6 billion by 2025
This funding round makes perfect sense, 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. These coveted consumer goods have become tradable commodities with “sneakerheads” around the world regarding them as investment assets. Not to mention this new potential valuation is more than double what StockX brought in back in June 2019, when investors valued the company at $1 billion. Forbes recently reported that StockX’s business surged 500% from a year earlier during the third quarter of 2020, a number that’s likely to go up.
What’s Next: In total, StockX has raised $160 million, thanks to sneakerheads along with its strong commission strategy ranging between 9% and 14%. They will need this new round of funding to fend off competitors like Goat, which raised $100 million in its Series E funding round, valuing the company at $1.75 billion. This upcoming round for StockX is expected to be the last private fundraising before an anticipated initial public offering in mid-2021, according to reports.
CBx Vibe: “Sneakers” Raekwon