Spain’s Wallapop raises $191M at an $840M valuation for its classifieds marketplace

Through all of the last year’s lockdowns, venue closures and other social distancing measures that governments have enacted and people have followed to slow the spread of COVID-19, shopping — and specifically e-commerce — has remained a consistent and hugely important service. It’s not just something that we had to do; it’s been an important lifeline for many of us at a time when so little else has felt normal. Today, one of the startups that saw a big lift in its service as a result of that trend is announcing a major fundraise to fuel its growth.

Wallapop, a virtual marketplace based out of Barcelona, Spain that lets people resell their used items, or sell items like crafts that they make themselves, has raised €157 million ($191 million at current rates), money that it will use to continue growing the infrastructure that underpins its service, so that it can expand the number of people that use it.

Wallapop has confirmed that the funding is coming at a valuation of €690 million ($840 million) — a significant jump on the $570 million pricetag sources close to the company gave us in 2016.

The funding is being led by Korelya Capital, a French VC fund backed by Korea’s Naver, with Accel, Insight Partners, 14W, GP Bullhound and Northzone — all previous backers of Wallapop — also participating.

The company currently has 15 million users — about half of Spain’s internet population, CEO Rob Cassedy pointed out to us in an interview earlier today — and it has maintained a decent No. 4 ranking among Spain’s shopping apps, according to figures from App Annie.

The startup has also recently been building out shipping services, called Envios, to help people get the items they are selling to buyers, which has expanded the range from local sales to those that can be made across the country. About 20% of goods go through Envios now, Cassedy said, and the plan is to continue doubling down on that and related services.

Naver itself is a strong player in e-commerce and apps — it’s the company behind Asian messaging giant Line, among other digital properties — and so this is in part a strategic investment. Wallapop will be leaning on Naver and its technology in its own R&D, and on Naver’s side it will give the company a foothold in the European market at a time when it has been sharpening its strategy in e-commerce.

The funding is an interesting turn for a company that has seen some notable fits and starts.

Founded in 2013 in Spain, it quickly shot to the top of the charts in a market that has traditionally been slow to embrace e-commerce over more traditional brick-and-mortar retail.

By 2016, Wallapop was merging with a rival, LetGo, as part of a bigger strategy to crack the U.S. market with more capital in tow.

But by 2018, that plan was shelved, with Wallapop quietly selling its stake in the LetGo venture for $189 million. (LetGo raised $500 million more on its own around that time, but its fate was not to remain independent: it was eventually acquired by yet another competitor in the virtual classifieds space, OfferUp, in 2020, for an undisclosed sum.)

Wallapop has for the last two years focused mainly on growing in Spain rather than running after business further afield, and instead of growing the range of goods that it might sell on its platform — it doesn’t sell food, nor work with retailers in an Amazon-style marketplace play, nor does it have plans to do anything like move into video or selling other kinds of digital services — it has honed in specifically on trying to improve the experience that it does offer to users.

“I spent 12 years at eBay and saw the transition it made to new goods from used goods,” said Cassedy. “Let’s just say it wasn’t the direction I thought we should take for Wallapop. We are laser-focused on unique goods, with the vast majority of that secondhand with some artisan products. It is very different from big box.”

It may mean that the company has not ballooned and boomed in the way that so many startups might, especially those fueled by hundreds of millions in investment and hype — some of which pays off spectacularly, and some of which cataclysmically does not. But it has meant a steady presence in the market, one perhaps built on a more solid identity.

Wallapop’s growth in the past year is the result of some specific trends in the market that were in part fueled by the COVID-19 pandemic. All of them have helped build up a profile for the company as a kind of upscale, virtual car boot sale or flea market.

People spending more time in their homes have been focused on clearing out space and getting rid of things. Others are keen to buy new items now that they are spending more time at home, but want to spend less on them, perhaps because they are facing employment or other economic uncertainty. Yet others have found themselves out of work, or getting less work, and are turning to becoming entrepreneurs and creating their own products to sell in a more grassroots way.

In all of those cases, there has been a push for more sustainability, with people putting less waste into the world by recycling and upcycling goods instead.

At the same time, Facebook hasn’t really made big inroads in the country with its Marketplace, and Amazon has also not appeared as a threat to Wallapop, Cassedy noted.

All of these have had a huge impact on Wallapop’s business, but it wasn’t always this way. Cassedy said that the first lockdown in Spain saw business plummet, as people faced severe restrictions on their movements, unable to leave their homes except for the most essential duties like buying food or getting themselves to the hospital.

“It was a roller coaster for us,” he said.

“We entered the year with incredible momentum, very strong.” But he noted that the drop started in March, when “not only did it become not okay to leave the house and trade locally but the post office stopped delivering parcels. Our business went off a cliff in March and April.”

Then when the restrictions were lifted in May, things started to bounce back more than ever before, nearly overnight, he said.

“The economic uncertainty caused people to seek out more value, better deals, spending less money, and yes they were clearing out closets,” he said. “We saw numbers bounce back 40-50% growth year-on-year in June.”

The big question was whether that growth was a blip or there to say. He said it has continued into 2021 so far. “It’s a validation of what we see as long-term trends driving the business.”

Naver has made a big business out of keeping strong regional focus in its products up to now, so in a way you could see it continue that while still growing, by investing in another strong regional player. Although it seems Wallapop has a site in the U.K., it’s not something that it has pushed much as a business.

“The global demand for C2C and resale platforms is growing with renewed commitment in sustainable consumption, especially by younger millennials and Gen Z,” noted Seong-sook Han, CEO of Naver Corp., in a statement. “We agree with Wallapop’s philosophy of conscious consumption and are enthused to support their growth with our technology and develop international synergies.”

I’ll also add that it is heartening, as a consumer, to see priorities like sustainability being given consideration, too. Hopefully it’s not just lip service but a genuine recognition that this is something that should be encouraged and backed.

“Our economies are switching towards a more sustainable development model; after investing in Vestiaire Collective last year, wallapop is Korelya’s second investment in the circular economy, while COVID-19 is only strengthening that trend. It is Korelya’s mission to back tomorrow’s European tech champions and we believe that Naver has a proven tech and product edge that will help the company reinforce its leading position in Europe,” added Fleur Pellerin, CEO of Korelya Capital.

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