With Series C Funding In Place, Chrono24 Expands Reach In Global Watch Marketplace

It's time to take things to the next level for the global luxury digital marketplace, Chrono24. The site, which facilitates sales of both new and pre-owned watches, just secured $118M plus in Series C investment thanks to global growth equity firm General Atlantic and Aglaé Ventures, the technology arm of LVMH founder Bernard Arnault's family investment company. Existing investors Insight Partners and Sprints Capital also contributed. Co-CEO Tim Stracke shared what the infusion of cash means next for the category leader.

The company reports fast growth and is currently profitable, so the funds aren't earmarked for day-to-day operations but to expand the growth proposition. Stracke noted that 2020 was the best year, with 2021 tracking to eclipse that, thanks to a pandemic-induced stay-at-home trend that bolstered online sales in general. Currently the have offices in Berlin, Hong Kong, New York with headquarters in Karlsruhe, Germany. Stracke indicated that they are open for growth outside of Europe. The main goal of the funding right now is recruiting top talents to expand market reach and increase global service efforts.

"For the last ten years, the focus was a great product and great service; people prefer this to great ads, so growth was organic," said Stracke of the company he co-purchased in 2010 from the founders. "One focus is to increase our marketing efforts. We started to build the marketing team around four years ago, having invested more strongly in SEO activities and starting with TV ads, content marketing, paid ads, and influencer marketing, but we weren't super aggressive before."

Another touchpoint is expanding their role in the logistics of the transaction. As a marketplace, they facilitate, and secure financial transactions using regulated banking partners to ensure both buyers are sellers are confident in making the transaction. He cites statistics that 70 percent of Chrono24 transactions are cross border with 30 percent of transactions being cross-currency, which despite being a global business, has its challenges. Currently, it falls upon the seller to arrange the shipping. Stracke sees a future where Chrono24 could have an active role. "For instance, perhaps we could offer a global logistics service to help facilitate and complete the transaction.

While the site is available in 22 languages, it filters geo-locally so that searches present the nearest watches first. But watches can be bought and sold across the globe. "The interesting part of this category, it's one of the most global consumer categories. For instance, when you go to Japan, Argentina, the United States, Australia and Europe, you'll find almost the same top ten brands and same top ten models." Stracke points out. "It's just the way the market works, but it also makes it quite easy. If a person in Japan buys an Omega Speedmaster, they know exactly what they will get. This industry requires a global provider, and Chrono24 is the market leader."

Watch collecting similarly involves what motivates another group of collectors, sneakerheads. Exclusivity, craftsmanship, design, and belongingness draw people to the luxury watch community. Despite smartphones eliminating the need for a watch, in places such as the US, which has a high percentage of wearers of smartwatch users, luxury watch purchases, in general, has risen 25 percent in the last five years. "Smartwatches are a gateway watch. This is likely increasing the demand for luxury watches."

For this reason, Stracke isn't concerned about Gen Z raised on tech who also cherish the 'secret' community of watches. "I don't care whether they wear Rolex, a quartz watch, or a smartwatch. Once they put something on their wrist, they will want something real."

These watches also are the antithesis of the disposal tech world we live in. "When I look at my life in 100 years, my family or I won't be here. But my watch collection will," says Stracke. "Having that feeling of longevity that creates desirability today. Smartwatches are not just occupying the wrist but rather paving the way for a luxury watch purchase."

As a luxury watch marketplace, Chrono24 may be in a class by itself. EBAY EBAY sells luxury watches, too, though not with the level of expertise and specialization in the category. Sites like Watchmaster, Watchfinder, and Watchbox use the site to sell stock. According to Stracke, the platform is used by over 3000 retailers and anywhere from 20,000 to 30,000 private sellers. Retailers generate the vast majority. "We compete for the very same customers as some have websites, but I consider them a partner; this is a reality for marketplaces."

When Stracke, Michael Krkoska, and Dirk Schwartz purchased the site in 2010, the decision was based partially on Starcke’s own subpar watch buying experiences. He felt the store sales model was outdated, and EBAY, not specific enough. 'I was searching for a Jaeger Le Coultre watch and was not a 100 percent satisfied user. It never felt like a great experience or had the coolness I was looking for; I felt we could do it better." He dreamt of a site where they understood your need, especially for trust, safety, and global search capabilities. He also had website e-comm experience and homed in on the potential of the luxury resale market, something bigger conglomerates such as Kering and LVMH have started to invest in recently. (Think Net-A-Porter, Yoox, Farfetch and Hodinkee, to name a few.)

His physical store watch buying experience steered him towards a digital experience as he found security processes slow- "I could have searched ten watches online at the same time," he says. They were also overpriced. "After buying a watch in a store, I would realize I just drank the most expensive espresso or glass of champagne as I could often find the same watch online for 20 percent cheaper." He points out Chrono24 alleviates the massive waitlists associated with store purchases that can last years. "A Rolex Daytona can keep someone waiting five or ten years; At Chrono24, it can be delivered in 24 to 48 hours depending on your location."

While it's not on the table right now, Stracke said he is keeping all options open for this next Series C funding phase. "We would never do a traditional industry store, but if we find another interesting way to bring the community together and give them a better experience, we are open to it," he hints, adding. "It's an exceptional category– it's not even niche. It's a 50-billion-euro industry. Lucky there are a lot of people keen on watches."