Michael Jordan, Giannis Antetokounmpo lift luxury watch start-up WatchBox to valuation nearing $1 billion

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  • Watch the secondary market Watchbox attracted NBA stars and other athletes in its latest financing round that values ​​the company at close to $1 billion.
  • The company said it is on track to generate $300 in revenue in 2021.
  • There is a growing demand for luxury watches from companies including Rolex, Patek, Audemars and Richard Mille.

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Michael Jordan has six NBA Championship rings. He also likes watches.

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The five-time NBA’s Most Valuable Player, now owner of the Charlotte Hornets, joins the list of athletes to invest in watchbox, a site that allows people to buy, sell and trade luxury watches. Brands include Richard Mille, a favorite of NBA players.

Watchbox said Tuesday that it raised $165 million in its latest financing round. Joining Jordan were Milwaukee Bucks star and reigning championship MVP Giannis Antetokounmpo, Bucks owner Mark Larry, Phoenix Suns stars Chris Paul and Devin Booker, and Wall Street investor Bill Ackman, among others.

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Watchbox, based out of Philadelphia, has reeled in $260 million since its inception in 2017. Although the company did not disclose its latest valuation, people with knowledge of the matter told CNBC that it is approaching $1 billion. The individuals asked not to be named because the assessment is private.

In an interview with CNBC on Monday, Watchbox CEO Justin Rees said the company is on pace to generate $300 million in net revenue this year, and may seek an IPO in the future.

Watchbox has an inventory valued at $150 million. Rather than serving as a marketplace for peer-to-peer transactions, the company buys and trades luxury watches from vendors. It then certifies the products and resells them to collectors and other buyers, capturing transaction fees in the process.

“It’s no different than dealing with Goldman Sachs,” Rees said of the stage. “We have customer advisors you talk to and manage your portfolio of watches as well.”

Luxury watches are in high demand

The secondary luxury watch market is booming as top manufacturers such as Rolex and Richard Mille avoid increasing supplies to cover up shortages around collections. This allows luxury lines to keep their value in the secondary market, especially as demand increases.

Morgan Stanley reported that Rolex sold 810,000 watches last year, while Patek sold 53,000 watches. Audemars sold 40,000 watches and Richard Mille only sold 4,300 watches.

Consulting firm McKinsey estimates pre-owned watch sales to reach $18 billion in 2019 and could climbing to $32 billion by 2025, According to the firm, by 2025 sales of used watches will be about half the size of the new retail watches market, up from about one-third today.

Watchbox isn’t alone in trying to capitalize on demand. Rivals such as Watchfinder, Watchmaster and New York-based Hodinky are also expanding for position in the secondary market.

Hodinki raised $40 million in December from investors including NFL quarterback Tom Brady. The company launched its pre-owned watch shop in October to buy and sell watches manufactured after 1990.

“In terms of size and scale, if you look at us in the market, we are probably the largest platform in terms of revenue,” Rees said, adding that Watchbox has grown to over $1 billion in total revenue since its creation. Is.

Watchbox plans to use the cash to expand its digital platform and open collector lounges in New York, Los Angeles, Miami, Houston and Dallas. International Watchbox locations include Dubai, Hong Kong and Switzerland, and Rees said the firm wants to reach 40 markets over the next three years.

Watchbox seeking an IPO?

Rees said the association with Jordan and Antetokounmpo will help Watchbox’s brand as it competes with other platforms.

Antetokounmpo led the Milwaukee Bucks to their first NBA championship in 50 years. He also has equity stake in companies like sports drink start-up Ready Nutrition.

Jordan, 58, is a sports icon, and one of the richest athletes in the world, with a net worth of $1.6 billion. Forbes,

Jordan has a stake in sports-betting company DraftKings. He became the first black majority owner of a full-time racing team in a NASCAR series after he bought Germain Racing’s team charter last September.

Rees said Watchbox wooed Jordan through his business partner, Curtis Polk. Former NFL stars Michael Strahan and Larry Fitzgerald were also involved in Watchbox’s financing round.

“Many people on that list, they’re our customers, so they have authentic relationships,” Rees said. “They’ll help us profile when we build the company.”

But even connecting with famous athletes would not be enough.

Watch platforms like Watchbox are benefiting from the boom in the luxury watch market that accelerated during the pandemic. The market will eventually correct itself, and only a few platforms can survive.

At the time, Watchbox could take public help to sustain itself. Rees said the company may eventually go for an IPO.

“I think our focus is really on getting bigger and bigger,” he said. “If it means bringing out an IPO strategy in the next few years to help facilitate that, we will certainly consider it.”

With the new tranche of private capital, “we have the funds to execute our short-term plans,” Rees said.

CNBC’s Robert Frank contributed to this article.

Watch: What Michael Jordan joining DraftKings means to Nike and the NBA


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