The sneakerhead economy is suddenly on fire.
GOAT, a sneaker resale app popular on iOS and Android, acquired Flight Club, a physical and online retailer where collectors buy and sell their prized sneakers.
Together, GOAT and Flight Club reportedly do $300M in gross sales! (See This Week in Data below.)
The startup — named for the sports acronym meaning the Greatest of All Time — grew out of a failing dining app. Its co-founders started the company with the $1.5M they had left over.
The most amazing part of this story is that LA-based GOAT only started in 2015. It went from being a germ of an idea to acquiring a 12-year-old physical retailer in less than 3 years.
Granted, Flight Club only has two stores (in LA and NYC), with plans for a few more. But one should not minimize the brand-name recognition of Flight Club, considered a hallowed hall by sneaker connoisseurs and where prized Air Jordans can sell for upwards of $50K.
At the same time, co-founder of GOAT and now CEO of the combined company Eddy Lu says he wants to transform sneaker retail broadly. He told Recode he’s "gunning for the FootLockers of the world.”
Meanwhile, streetwear and sneaker retailer StadiumGoods was just backed by LVMH Luxury Ventures.
We examined where luxury brands are investing in startups and tech here.
Seems the worlds of luxury, athletic, and street apparel/footwear are merging.
Have a great weekend.
P.S. On February 15, we're looking at the latest tech advancements in AI, how AI is reshaping industries, and more. Save your spot at the briefing here.
This week in data:
- $250M: Sneaker retailer Flight Club has announced it will be partnering with GOAT, which offers a mobile marketplace for buying and selling hard-to-find sneakers. While the companies are calling the transaction a merger, from the outside it appears that GOAT is acquiring Flight Club. The combined company has raised a new $60M from Index Ventures, though a majority of those funds will reportedly be used to pay out Flight Club’s shareholders. The new company also does more than $300M in gross annual shares and has reached a valuation of $250M.
- 8: Our latest bracket asks you, which city will be the home of Amazon’s second headquarters? We’re starting with the top 8 contenders: Atlanta, Toronto, Austin, Pittsburgh, Raleigh, Northern Virginia, Denver, and Boston. (So far Atlanta & Raleigh are in the lead, beating out Toronto and Northern Virginia, respectively.) Round 1 closes Sunday — don’t forget to cast your vote.
- $121B: Telecommunications company Qualcomm has rejected Broadcom’s “best and final” acquisition offer of $121B. (Earlier this week, Broadcom reportedly raised its offer from $70 per share to $82 per share after Qualcomm rejected a first offer.) In an open letter to Broadcom CEO Hock Tan, Qualcomm chairman of the board Paul Jacobs wrote, “Your proposal is inferior relative to our prospects as an independent company and is significantly below both trading and transaction multiples in our sector.”
- 12 : This week, Tyson Ventures (the investment arm of Tyson Foods) financed a second tranche of a Series A round to smart steam oven company Tovala. Before this round, Tyson Ventures invested in Tovala, as well as in alternative protein-focused startups Beyond Meat and Memphis Meats. We dive into Tyson and other meat leaders' investments in alternative protein startups in our latest report, which looks at 12 important food industry trends to look out for in 2018.
- $2.4B: Google is reportedly buying the Chelsea Market building in Manhattan for roughly $2.4B. The current food mart, office building, and tourist attraction sits across the street from Google’s NYC headquarters. According to the NY Times, the purchase comes with the ability to add on 8 stories, or 300,000 square feet to the already large property.
- 11: This week Walmart acquired Spatialand, a producer of virtual reality experiences. The company — focused on consumer shopping experiences — previously worked with Walmart’s technology incubator Store No. 8, and has now been acquired by the group as its third portfolio company. Based on Walmart’s past acquisitions and future goals, we took a look 11 other startups that could be compelling acquisition candidates.
- 17,119,594: SpaceX launched its Falcon Heavy rocket for the first time and has since garnered 17,119,594 views on YouTube as of noon on Friday. Deploying from Florida, the Falcon Heavy carried Elon Musk’s red Tesla into orbit, traveling a distance far beyond Mars. The launch was considered a success, and according to The Verge, “its launch marks the first time a vehicle [that] massive has ever been sent up by a commercial company.” Aerospace is just one area Elon Musk and his companies plan to upend. Check out the 8 industries, from transportation to healthcare, they’re disrupting here.
- 333%: Snap’s earnings report, released Wednesday, highlighted a year of growth for the company, which added 8.9M daily active users in Q4’17 to ultimately reach 18% daily active user (DAU) growth year-over-year. One contributing factor was Snapchat’s growth in the developing world. The company’s “Rest of World” market (i.e. not Europe or North America) added 3M daily users in Q4’17 alone, with Rest of World revenue growing 333%.
- 3.8 billion light years: A team of University of Oklahoma researchers became the first scientists to discover planets in galaxies beyond the Milky Way. Using data from NASA’s Chandra X-ray observatory, the team was able to identify extragalactic planets about 3.8 billion light years away. Dr. Xinyu Dai, who led the study, estimated that the number of planets in the galaxy his team observed exceeds one trillion. Our space tech market map highlights 57 tech startups with their eyes on the stars, from private spaceflight companies to satellite developers.
- 103.4 million: The number of viewers who tuned into Super Bowl LII. Viewership slipped 7% from last year’s game, making Eagles vs Patriots the least-watched Super Bowl game since 2009. The game nonetheless secured a spot on the list of the top 10 most-watched American television programs all time, coming in at No. 10 after the last 8 Super Bowls and the 1983 series finale of “M*A*S*H.”
- 1: Rather than shell out some $5M for a 30-second Super Bowl commercial, Skittles limited its latest commercial to an audience of one, selecting Skittles fan Marcos Menendez to be the sole viewer of the world’s “most exclusive ad.” Skittles streamed a video of Menendez watching the ad, which features “Friends” star David Schwimmer and was shot in Menendez’ hometown, over Facebook Live during Sunday’s game.
- 86: It’s 2018, but the Tide Pod Challenge problems persist. There have already been at least 86 cases of “intentional exposure” to the laundry detergent pods in the first three weeks of 2018. To combat the epidemic, assemblywoman Aravella Simotas and state Senator Brad Hoylman proposed a bill calling on manufacturers to make the pods look less...edible. “We’re asking for all laundry detergent pods to be uniform in color. We don’t need them to look like Gummy Bears,” said Senator Brad Hoylman in a press conference.