(Bloomberg) — French technology startup Back Market has started early work on a potential initial public offering, as it seeks to tap into heightened demand for secondhand devices, people familiar with the matter said.
The company, which operates a marketplace for refurbished smartphones and other consumer electronics, has had informal discussions with banks about a potential listing, the people said, asking not to be identified discussing confidential information.
Back Market is considering listing as soon as next year, though it hasn’t set a precise timeline for the potential share sale, the people said. It’s aiming for a higher valuation than it achieved in its $510 million fundraising round this year, which valued the business at $5.7 billion.
Deliberations are in the early stages, and Back Market could opt to raise more funds from private investors before proceeding with an offering, the people said. A representative for Back Market said it’s working to improve its financial and legal procedures, though an IPO isn’t the company’s “top priority in the near future.”
Large European startups are increasingly shying away from the IPO market due to a sharp drop in valuations, particularly for publicly traded tech stocks. Investors have also turned more risk-averse due to heightened inflation and the threat of a recession, making listings more challenging.
Technology companies that completed IPOs in Europe last year have since fallen an average 42% from their offer prices, according to data compiled by Bloomberg weighted by offer size. The number of new listings globally in the first half of this year was about half the same period in 2021, the data show.
So-called circular economy companies that allow consumers to buy used goods have grown in popularity in recent years. German consumer-tech subscription platform Grover raised funds at a valuation of more than $1 billion in April. Vinted, the pre-owned clothes app and Lithuania’s first unicorn, raised money from investors last year at a 3.5 billion-euro pre-money valuation.
Back Market has received funding from investors such as Eurazeo SE, General Atlantic, Generation Investment Management and Goldman Sachs Group Inc.
(Updates to add IPO performance in sixth paragraph)
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