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Going after a reported $1 billion market, GOAT offers authenticity to sneaker aficionados
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Some people love spending their disposable income on vintage clothing. Other people love spending on designer handbags. And still other people love dropping tons of cash on sneakers—especially if they have a star athlete’s name blazoned across their sides.
GOAT, an online marketplace to buy and sell rare sneakers, announced today that it has secured a $5 million venture capital round led by Matrix Partners with participation from existing investors Upfront Ventures and Webb Investment Network.
As part of the round, Josh Hannah of Matrix will be joining GOAT's board of directors. Added to previous funding from Andreessen Horowitz, First Round Capital, NEA, SV Angel, and Y Combinator, the company has raised a total of $12.6 million to date.
GOAT, as you may know if you follow sports fans on Twitter, stands for “greatest of all time.” While the phrase is often used to talk about athletes—and, more often than not, to compare today’s best basketball players with Michael Jordan—the term can be used for just about anything, including shoes. In fact, the top definition on Urban Dictionary has this as its sample sentence: “Those shoes are G.o.a.t.”
It doesn't take much research to see that the resale market for sneakers is massive. In 2013, approximately 2.25 million pairs of sneakers were sold for about $200 million in 2013, according to data from Campless (via Quartz). Air Jordan sneakers alone, the Nike brand endorsed by Jordan, accounted for over $62 million of those sales. Internationally, GOAT says the sneaker resale industry is estimated to be worth more than $1 billion.
But GOAT isn’t just a sneaker-specific eBay. As in some other secondhand marketplaces, like the one for designer handbags, authenticity is a big deal. You don’t want to drop hundreds (if not thousands) of dollars for something if it’s not the real deal.
That’s where GOAT sees opportunity.
The company has an extensive process in place to make sure sneakers sold through the platform are authentic. Not only does the online service use various tools to check the sneakers in advance, but once a purchase is made the shoes are first sent to GOAT so that a human specialist can inspect the shoe’s label, stitching, texture, and color. If confirmed authentic, then the shoes are passed on to the customer. If not, the customer gets their money back.
The company says over 500,000 people have joined GOAT since its iOS and Android apps launched in July 2015. Additionally, the marketplace, which today features over 25,000 sneakers, has seen 40 percent month-over-month revenue growth with average order values exceeding $300.
"Traditionally, consumers purchasing rare or vintage sneakers online had trouble finding what they were looking for, and then couldn't be certain of authenticity," said Josh Hannah, General Partner at Matrix, in a prepared statement. "With GOAT's simple mobile app and commitment to verifying authenticity for every order, they provide a convenient and secure marketplace for sellers and consumers.”
It will be worth seeing whether the company can sustain its growth and take sneaker resale market share from more broad-based players like eBay.
Ed. note: Our 6th Annual Vator Splash LA conference is coming up on October 13 at the Loews Hotel in Santa Monica. Speakers include Mark Cuban (one of the hosts of Shark Tank and owner of the Dallas Mavericks); Brian Lee (Founder & CEO, Honest Company); Leura Fine (Founder & CEO, Laurel & Wolf ); Nick Green (Co-Founder and Co-CEO, Thrive Market); Tri Tran (CEO & Co-founder, Munchery); Adam Goldenberg (Founder & CEO, JustFab); Andre Haddad (CEO, Turo); Mike Jones (Founder, Science) and many more. Join us! REGISTER HERE.
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