French tech unicorn marketplace Back Market has shifted its focus to profitability after a challenging funding environment in 2022. Following a US$ 510 million Series E fundraise at a US$ 5.7 billion valuation, the company implemented strategic changes, including layoffs and halting international expansion plans, to optimize for financial stability. With these adjustments, Back Market achieved for the first time profitability in Europe this year.
Streamlining operations for resilience
Founded in 2014, Back Market initially prioritized growth, but rising interest rates and a tightening venture capital market required a strategic pivot. In response, the company reduced in 2022 its workforce by 93 employees and scaled back plans for international expansion, particularly its anticipated entry into the Indian market. Additionally, Back Market began outsourcing some of its processes to partners, helping streamline costs and maintain focus on its core mission of sustainable electronics.
Financial recovery and expansion
Despite the operational cuts, Back Market is now experiencing significant revenue growth, with a 45% increase in turnover in 2023, reaching € 320 million. The company’s refined approach includes deepening its presence in established markets like the US and Japan. Now operating in 18 countries with a workforce of 700 employees, Back Market is on track, according to the company, to achieve long-term profitability in Europe, strengthening its competitive edge in the refurbished electronics market.
Strategic growth and sustainability
Alongside its profitability goals, Back Market is exploring mergers and acquisitions to support its sustainability mission. Targeted M&A could further expand the company’s influence within the circular economy for electronics, potentially acquiring businesses in sustainable tech solutions, such as battery design. Back Market is also considering investments in startups aligned with its mission to promote refurbished electronics as a mainstream choice.
Long-term vision for sustainable growth
While Back Market’s leadership has not ruled out future liquidity events, including an IPO or private equity takeover, the current focus remains on expanding market share and enhancing profitability across its existing territories. By strengthening its position in Europe and scaling responsibly, Back Market has established itself as a leader in the secondary mobile marketplace. However, sources close to the company indicate that its U.S. operations continue to face challenges in achieving profitability.
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