American men fall in love with sports shoes, Silicon Valley invested 300 million U.S. dollars in this market

When Danny Rimer learns that an online sales platform for athletic shoes called Goat is looking for investors to help expand its business, he recommends his venture capital firm, Index Ventures, lead the $ 60 million.

GOAT sells such limited edition sneakers as Nike Air Jordan and Adidas Yeezy. Rimer said: “There is no doubt that the sports shoe market has opened a real take-off pace, and these companies have come up with effective solutions that allow users to easily browse, buy and sell sports shoes. Completed this round of financing, raising the total financing of GOAT to 97.6 million U.S. dollars. He said, “It will soon become a universal phenomenon.”

Index Ventures is just one of many venture capital firms that have recently started to focus on the $ 65 billion footwear industry. Despite the overall weakening in apparel sales, the development of the sneaker market has thrived due to continued strong user demand for limited edition shoes and fashion sneakers. In addition, this is an area where major electricity providers such as Amazon have not yet swallowed up.

In the past three years, venture capital firms have invested more than $ 300 million in the sneaker market, involving more than 20 sneaker start-ups. These start-ups are committed to making sneaker online transactions more accessible and eliminating fake and shoddy products in the industry. Related huge sums of money will be sports shoes occupy Facebook feed and Pinterest and other major social media pages. Among the investors are well-known venture capital firms Silicon Valley such as Kleiner Perkins and Caufield & Byers, as well as celebrities such as Mark Wahlberg and Will Smith. From Hollywood to Sand Hill Road, it seems that everyone in the market about the foot cast a heavy heart.

Rothy’s, a San Francisco-based footwear startup, sells flat-bottomed shoes made of plastic waste bottles to consumers for $ 125 a pair, aiming for a green concept. In contrast, Birdies sells suede slippers with a leopard-print tassel for $ 140. And those accustomed to walking casual style technicians are buying Allbirds wool sneakers. Stance’s goal is to treat “socks and poems” as the latest trendy way to express yourself.

The main audience for the footwear market is men, who are in fact equally obsessed with fashion. Due to the relaxation of the workplace, ties have been declining in men’s closets, and smart phones have replaced the specific status of watches. The socks and shoes have become a lot of dudes pursuit of fashion products. Market research firm NPD Group data show that sales of casual shoes in the United States, including comfortable, work-friendly sneakers soared 17% in 2017 to 9.6 billion.

GOAT, the leader in the industry, reportedly had 15 million monthly visits. This is a platform for selling old and new sports shoes, the main business is to sell limited edition Nike and Adidas sneakers. All shoes that are traded online will be checked in Culver City, California, and Secaucus, New Jersey. GOAT draws a 12.4% commission on each transaction, with an average of about $ 300 each.

The platform has 7 million members, each member has registered information on personal preferences and shoe size. In addition to raising $ 30 million, GOAT also announced the acquisition of Flight Club, a sports consignment store with physical stores in New York and Los Angeles. Eddy Lu, chief executive, said the company will have annual sales of hundreds of millions of dollars after the transaction is successful.
Amazon sold just over $ 3.7 billion in footwear last year, according to One Click Retail, a market research firm, but Lu and his investors think the niche sites have plenty of room to focus on their own unique product inventory. “Amazon is great for everyday products like toilet paper and dog biscuits,” said Lu. The products you buy at Amazon have no soul at all. A new generation of consumers really value. And planning, what they buy is not just something that is not a commodity. ”

Sneaker manufacturers have created a secondary market by restricting product inventories and frequently releasing new ones to keep the brand attractive, and GOAT estimates the market has reached $ 2 billion in market value. Greg Bettinelli, a GOAT investor and partner at venture capital firm Upfront Ventures, said the launch of the new Air Jordans, a limited edition trading platform outside of the sneaker store, highlights the specialization of hands-on exams Fight against fakes. In contrast, e-commerce platforms such as Amazon and EBay rely heavily on consumer complaints to crack down on counterfeit goods.

Bettinelli was with EBay in 2007, when EBAY acquired the ticketing platform StubHub. He believes the sports shoe market will be comparable to the secondary market for ticketing sales.

Sucharita Kodali, an analyst at market research firm Forrester Research Inc., is more cautious. She said: “Sports and leisure may be the next trend, but may also be bankrupt,” You have the opportunity to vote in the next Lululemon or Under Armor, this is just a game about lifestyles. “