StockX, an online marketplace that uses a stock market-like bid/ask process to connect buyers and sellers, has landed $6 million in funding from an array of celebrity investors, including Mark Wahlberg, Eminem and Paul Rosenberg, Ted Leonsis, Steve Case, Tim Armstrong, Scooter Braun, Jon Buscemi, Wale, Joe Haden, DJ Skee and Silicon Valley investor Ron Conway and his SV Angel fund.
The Detroit-based, self-described online consumer “stock market of things” was co-founded last year by entrepreneur Josh Luber and Dan Gilbert, founder and chairman of Quicken Loans and majority owner of the 2016 NBA Champion Cleveland Cavaliers. StockX initially focused on creating a marketplace for retro sneakers, but is in the process of broadening its aims to become an e-commerce site for “whatever you can buy or sell using a stock market,” according to Fortune.
Last month, Nike released a retro sneaker line on StockX from Cavs superstar LeBron James as part of the ‘Cavs Court SPO’, or StockX Product Offering. The release included limited-edition sneakers in a shoebox made from wood from the Cleveland Cavaliers' championship court and a Cavs championship ring.
The sum of $6 million seems like loose pocket change for some of the big names that participated in this funding round, and knowing that they clearly each contributed just a portion of that sum somehow makes the amount seem even smaller (like we can talk — no one has handed us $6 million lately).
Still, StockX is dreaming big. Competition may have as much to do with that as ambition. The sneaker marketplace market is not exactly virgin territory, with players such as sneaker marketplace app GOAT and sneaker and apparel marketplace Stadium Goods also playing in the same space. The stock market approach StockX is taking certainly differentiates it from those other companies, but it may be looking to further separate itself by planning to host other kinds of consumer goods for sale.
Of course, that broader approach takes StockX right into the realm eBay (another company that knows a thing or two about accepting bids) and Amazon. For its part, eBay has been pushing ahead with its own marketplace strategy to limited success, while Amazon been aggressive setting up its own marketplaces, but also has met with some controversy about whether or not it was being fair to sellers who had generated customer complaints.
The marketplace strategy is becoming extremely popular in the e-commerce sector, and against both niche competitors and broad-reaching e-commerce giants, StockX has the advantage of a distinct business model. That could take it a long way. However, no matter how distinctive your approach is, you still need to get customers to buy in. Can StockX get them to buy and sell sneakers and other products using the stock market framework?
The other thing that could factor into the success of StockX is how much its embrace of high-end product offerings, like the Cavs Court SPO, will define its marketplace. Being a luxury-level marketplace could help it further separate itself from the marketplace pack, but it might want to be careful to make sure that someone else besides its celebrity investors can afford what's for sale.