Hot on the heels of Foxway’s Q2 results, is the latest filing from Refurbed, another major organisation in the European Consumer Electronics circular economy, although occupying a different place in the value chain. I first reported on Refurbed back in February this year alongside some of the other key European marketplace organisations including Asgoodasnew, Rebuy and Swappie1. Back then, the overall picture of strong revenue growth and hard-to-find profitability was driven by intense price-based competition, scale economics and increasing secondary market participation from OEM’s and Retailers. Not a whole lot has changed, other than competition has become more intense and in some cases, profitability has got worse. So, let’s dive in and see how Refurbed are adapting…
Recap
Refurbed are based in Austria and are one of the best known marketplaces in Europe. In addition to their home market, they serve Belgium, Czech Republic, Germany, Denmark, Spain, Finland, France, Ireland, Italy, the Netherlands, Poland, Portugal, Sweden, Slovenia, Slovakia, and Switzerland. They provide a true marketplace for sellers and buyers, along the lines of Back Market. Unlike Back Market, for better or for worse, they file public accounts.
I assume that smartphones make up the bulk of their sales but, Refurbed also offer Laptops, desktops, tablets, headphones, smartwatches, consoles and cameras. They go beyond Consumer Electronics and offer product lines across the Home & Kitchen category as well as Sports Equipment and Baby & Child. Products are backed by the knowledge that you’re saving the planet and a minimum one-year warranty (provided by the seller) which you can extend with Refurbed, for a fee.
I’m not aware of any external investment since their Series C round in 2023 which came in at $58m (~€49m) for total equity funding of $131m (~€110m) over 5 rounds. Investors include Speedinvest, Evli Growth Partners and C4 Ventures. Management restructured the entities in 2023 resulting in the holding company Refurbed GmbH; the main operating company, Refurbed Marketplace GmbH; Refurbed Direct GmbH for direct sales or acquisitions of devices and; Refurbed Plus GmbH for additional services including the extended warranties. Only Refurbed Marketplace file full accounts so the first couple of sections focus specifically on that entity.
Performance
Management will be pleased with the sustained top-line momentum as revenue grew 19.3% YoY from €61m in FY2023 to €72.3m in FY2024. There’s a bit of licence here but, by using a (non-weighted) average commission from the January 2025 sellers guide of 10.5%, suggests that Refurbed’s FY2024 GMV was approximately €688m, slightly above the ECDB estimate of €660m2. Alongside the previous year’s estimated GMV of €577m (FY2023) and €333m (FY2022), the announcement back in April that they’d surpassed €2bn cumulative GMV since inception was reassuring. But, across the sector, revenue growth does not appear to be the issue.
Unfortunately, like many other retailers and marketplaces, there’s no revenue analysis either by country or by product category. I understand why, but it does mean any further commentary is complete supposition. Still, if I was to suppose that between 50% and 70% of sales were smartphones, that puts 2024 volume between 905k and 1.27m devices flowing through the marketplace, placing Refurbed somewhere near the top of the European marketplace pyramid, although still some distance behind Back Market.
Profitability
Before I dive in here, it’s important to note that Refurbed announced they had achieved profitability in June 20253. On what basis, I don’t know. I’ll have to wait until the next filing, but that’s great news.
In the year, however, Personnel Expenses rose 14.6% from €12.9m in FY2023 to €14.8m in FY2024. Add to that the Contracted Personnel costs in Other Operating Expenses rising to €13.4m and the total people costs came in at €28.2m. With contracted personnel representing 47.5% of total people costs, management clearly recognised cost flexibility over permanent headcount. Regardless, given the overall result, management took the extremely tough decision to reduce workforce earlier this year by around 20%4.
Overall, Other Operating Expenses rose from €63.2m in FY2023 to €76.9m in FY2024. That’s a hefty 21.7% increase and appears to have been mostly driven by marketing and operational expenses rising from €35.9m to €49.3m and the largest expense component at just over 64% of the total. Perhaps this is simply a reflection of the increase in competition. Clearly, I don’t have the exact ad-spend, but that’s an additional €13.4m to bring in €11.7m more revenue, or to put it another way, a 0.87x marketing ROI. Again, there’s a big assumption in there but, ouch.
Payment processing and financial transaction fees rose to €7.6m, a 13.4% increase probably reflecting the increase in revenue / volume. IT and communications costs rose 65% to €3.3m. It appears that some cost control was placed over discretionary spend as the Other Expenses fell 56.6% to €3.3m.
All of this meant the FY2024 Operating Loss widened to €19.4m from €18.6m in FY2023. Add a further €0.4m of net financial costs and the Net Loss came in at €19.8m, a slight increase of €0.5m on the previous year. As I suspected in the February article, the result, or at least no improvement on the annual result, would have been the catalyst pushing management into reducing the workforce. But, given the profitability announcement a few months later, it would appear their actions had the desired effect and put the business onto a more sustainable footing.
Balance Sheet & Cashflow
Not all of the Refurbed entities are large enough to file an income statement, but they do file Balance Sheets. Like others in the sector, Refurbed Direct GmbH literally doubled down on inventory from €368k to €760k expanding direct acquisition alongside the core marketplace model. Refurbed Plus GmbH achieved profitability for the first time, generating €485k profit after €330k losses in 2023, whilst accumulating cash from €363k to €1.43m. This would suggest the extended warranties continued to gain some traction over the year.
Refurbed Marketplace GmbH increased bank debt from €1.05m to €6.85m, though the specific purpose isn't clear from the accounts. There’s no note so it’s not possible to tell if the increase was necessary because the €18.25m equity injection wasn't sufficient (see below), or whether it represents a cheaper financing mix to preserve equity capital. Trade creditors also rose 50% to €4.74m, effectively providing €1.6m additional supplier financing as the business scaled, whilst intercompany payables to related entities fell from €11.48m to €6.09m, perhaps due to some internal debt restructuring within the group.
The marketplace entity deployed €18.25m of (Series C) funding through capital reserves, bringing total equity injections to €41.49m over 2023-2024. The €19.8m net losses resulted in accumulated losses of €39.09m. Despite this, cash increased from €4.54m to €6.65m, indicating the capital injection more than covered operating losses and suggests that maybe €12-13m of Series C funds remain undeployed, which provided sufficient runway for the profitability achievement announced a few months ago.
Summary
The end of 2024 and the first few months of this year must have been extremely challenging for management and even more so for the people directly impacted by staff cuts. An especially rough calculation would mean that a 20% workforce reduction provided annual cost savings of approximately €5.5m which could mean an additional five months runway, pushing out the next funding requirement to mid-2026. That probably means management are well underway with discussions for their next raise.
That can't be easy. As we know from the February article, there's a distinct lack of profitability in the sector and more recent reference points like Foxway's Q2 results will certainly act as a valuation constraint. Foxway’s negative €21.3m operating cash flow in H1 2025 demonstrates precisely the working capital intensity that will be concerning growth investors about the circular economy models. With Foxway's available liquidity having contracted 39.8% to just €43.6m despite their substantial scale, investors will be scrutinising unit economics far more rigorously than during previous funding cycles. This backdrop suggests Refurbed's discussions are more likely centred around bridge financing from existing investors rather than a full Series D, providing 12-18 months to demonstrate sustained profitability before attempting to access new capital in what may be a more favourable market environment as macro tailwinds begin to blow a bit harder. The alternative, waiting until mid-2026 for investment conversations, would be imprudent given how quickly sector conditions have challenged even the most established players.
If Refurbed’s €688m GMV cannot generate operational leverage, what transaction volume can? Alas, the answer to that might be in Back Market’s accounts. As OEMs continue to expand their offerings to entice new product spend and carriers try to hit trade-in targets for their sustainability goals, how can pure-play marketplaces continue to justify customer acquisition spending in a price-based market? And, there’s only so much margin pressure sellers can take before they begin to revolt. So, I’ll go back to my consolidation narrative. In order to achieve viable unit economics, someone will have to go big. The question is, who?
Peace,
sb.