The StockX megaround smells like pre-IPO money

Earlier today, TechCrunch reported that consumer reseller marketplace StockX raised $275 million at a valuation of approximately $2.8 billion.

Selling a tenth of your company for north of a quarter-billion may be somewhat common among late-stage software startups with tremendous growth, but one known for its market share in the sneaker resale niche? Don’t laugh, the round actually makes pretty OK sense. And given the growth that StockX has managed, it could have a path to the public markets in under a year.

Don’t laugh, the round actually makes pretty OK sense.

In our piece covering the funding round, Matt Burns wrote that StockX saw its nondomestic sales rise 260% in Q3 compared to the year-ago period, recording half of its 13 million transactions in the last 12 months.

But that wasn’t really enough to get my head around the round, so I went hunting. Here’s a grip of other, dated growth metrics that help us put the new funding into proper context:

  •  In mid-2019, when StockX became a unicorn after raising $110 million, it reported $100 million or more in monthly gross merchandise volume. It had around 800 employees at the time.
  • As part of that deal, a former eBay exec and former NYSE executive vice president of the New York Stock Exchange took over as CEO and took a board seat. The man in question, Scott Cutler, remains the company’s chief executive.
  • StockX claimed more than $1 billion in gross merchandise volume in 2019 (the company supports streetwear and luxury resales as well as sneakers). The company closed out 2019 with around 1,000 employees.
  • In mid-2020, StockX released a midyear report — née “corporate brag sheet” — saying that it had surpassed $2.5 billion in gross merchandise volume, and 10 million trades, half of which had been recorded in the last year.

To understand if those numbers are impressive or not, we’ll need to convert gross merchandise result into revenue. So, we’ll need to better understand StockX’s fee structure.