Foot Locker is investing $100 million in GOAT Group, which operates online footwear marketplaces GOAT and Flight Club. Foot Locker’s investment will bring the total raised by GOAT Group to $197.6 million since it was founded in 2015. This latest round brings GOAT’s valuation to more than $550 million.
Over time, Foot Locker and GOAT Group will combine efforts across digital and physical retail platforms to create exclusive customer experiences, according to a statement. The investment also is expected to help accelerate GOAT Group’s global operations. With nearly 3,220 stores in 27 countries, Foot Locker’s global locations can potentially serve as new access points for GOAT sellers and shoppers.
The funding is the latest move by Foot Locker to ramp up its digital footprint. The retailer recently invested a combined $20 million in three digital-first companies: women’s luxury activewear brand Carbon38, children’s lifestyle brand Super Heroic and footwear design academy Pensole.
To take the risk out of purchasing sneakers online, which can cost hundreds of dollars for one pair, Eddy Lu and Daishin Sugano co-founded GOAT to serve as an online marketplace dedicated to safe transactions for sneakers. Lu and Sugano sought to establish an authentication process for reselling sneakers, since counterfeiting had become such a widespread problem on major platforms like eBay and Amazon. In getting the marketplace off the ground, the co-founders sought to cater to the large Millennial demographic of “sneakerheads” — consumers who collect sneakers as a hobby.
“In 2015, we pioneered the ship-to-verify model with a mission to bring a seamless and safe customer experience to the secondary sneaker market,” said Lu in a statement. “With over 3,000 retail locations, Foot Locker will support our primarily digital presence with physical access points worldwide, bringing more value to our community of buyers and sellers. Having Foot Locker as a strategic partner will also expand our business as we continue to scale our operations both domestically and internationally.”
In February 2018, GOAT merged with Flight Club, which also operates three retail stores in New York, Los Angeles and Miami. GOAT Group raised $60 million in the process from venture capital firms Index Ventures, Accel, Matrix Partners, Upfront Ventures and Webb Investment.
The online secondary sneaker market has exploded in recent years, especially as athletic footwear has become more intertwined with fashion and lifestyle. Sneaker listings on the GOAT platform have tripled over the past 12 months to 750,000, and the company has plenty of competition from marketplaces StockX and Stadium Goods, which also launched within the last four years. StockX raised $44 million in September 2018, while Farfetch acquired Stadium Goods in December 2018 for $250 million.
Scott Martin, a Senior VP of Strategy and Store Development at Foot Locker, will join the GOAT Group Board of Directors as part of the financing.