In their latest financing round, American luxury watch company WatchBox have reached a valuation close to USD 1 billion. Their newest investors include six-time NBA championship winner, owner of the Charlotte Hornets and watch-enthusiast Michael Jordan, current NBA MVP Giannis Antetokounmpo, co-founder and CEO of Avenue Capital Group and co-owner of the Milwaukee Bucks Marc Lasry. Phoenix Suns stars Chris Paul and Devin Booker and Wall Street investor Bill Ackman.
WatchBox was founded in 2017 by Danny Govberg, Justin Reis and Tay Lian Wee and is based just outside of Philadelphia. The company trades luxury watches by buying watches from sellers, evaluating and authenticating them, and then selling them to buyers and collectors. In this latest round of funding, they raised USD 165 million; in total, since their founding, they have received USD 260 million in equity capital. The newest funding will expand its digital platform and open collector lounges in a few major cities across the world.
In the luxury watch market, the pre-owned watches segment is the fastest-growing; according to consulting firm McKinsey, the market was worth USD 18 billion in 2019 and by 2025 should have a valuation of USD 29 – 32 billion. Their 2025 valuation puts the pre-owned watch market as being responsible for more than half of the value of the whole luxury watch market. The reason for this sudden and dramatic growth comes from younger consumers driving demand and, for a variety of reasons turning away from buying luxury watches directly from the brands. McKinsey have determined that the three main reasons people are turning to pre-owned watches are watch enthusiasts wanting to purchase discontinued models, impatient shoppers and value seekers.
WatchBox is one of the largest pre-owned watch platforms in the world, and its dominance in an online space is part of what makes it so successful. During the pandemic and amidst unprecedented lockdowns, the demand for online shopping grew considerably. Furthermore, many people are turning towards second-hand items because it is a more sustainable choice. One of the exciting things for sellers and buyers is a luxury watch’s ability to retain high value, with many still going for hundreds of thousands of dollars. This is because luxury watch brands only release a limited amount of each collection, meaning that even though a watch is second-hand, it is still rare.
The growth in the second-hand luxury market is not limited to just watches. The Resale Report has been monitoring the growth of the second-hand luxury fashion market, and similar to watches, it saw a pandemic boom that seems to be continuing. Furthermore, the luxury fashion rental market has also been increasing in popularity. This is frequently contributed to the changing fashion ethics, especially around sustainability, that younger consumers have.
WatchBox are participating in the fifth Dubai Watch Week.