First they were oblivious, then they were in denial, latterly they have become concerned and finally they have woken up and embraced the disruptive power of Chrono24.
Aglaé Ventures’ participation in a €100 million funding round, announced today, is a sure sign that the luxury world has crossed the Rubicon when it comes to ecommerce and the potential of Chrono24 in what CEO Tim Stracke once told me would be a “winner takes all” market.
Aglaé Ventures is a technology-focused venture capital firm based in Paris, New York and San Francisco that is backed by Groupe Arnault, the controlling shareholder of LVMH.
It offers Chrono24 the opportunity to plug into the LVMH ecosystem and global footprint that can be harnessed to accelerate growth from the group’s 70 brands, 150,000 employees and 4,000 stores.
Aglaé Ventures’ investment does not make Chrono24 an LVMH brand like the direct acquistion of Tiffany, but it brings the company into its orbit and sphere of influence.
WATCHPRO’s first article about Chrono24 was back in 2015, but my first face-to-face interview with CEO Tim Stracke was in the summer of 2018.
At the time, the online marketplace welcomed more than 7 million unique visitors per month and was on track to sell luxury watches worth €1.2 billion that year.
Today’s news of a €100 million funding round did not come with any financial figures, but it does report that the platform attracts an average of 500,000 unique visitors per day.
It has more than 3,000 retail dealers and 30,000 private sellers across more than 100 countries worldwide and lists approximately half a million luxury watches for sale at any given time.
We live in an era when it is impossible to walk into a Rolex, Patek Philippe or Audemars Piguet authorised dealer and walk out with any of their most popular watches.
In fact, you cannot even get on a waiting list.
Chrono24 has 21,117 brand new Rolex watches advertised for sale right now, thousands of which are the impossible to buy steel sports models; all of them selling at significant mark-ups to official retail prices at authorised dealers.
Aglaé Ventures’ investment effectively means that the Arnault family has bought a stake in the biggest grey market watch business in the world.
The grey market used to be a place to pick up a bargain. Now it is fueled by its ability to offer unicorn watches at premium prices.
Grey is augmenting the explosive growth of pre-owned. There may be over 20,000 new Rolexes listed on Chrono24, but there are almost 70,000 watches from the brand in total, so 50,000 are used.
The second hand market for luxury watches barely existed a decade ago, but it is becoming almost as mainstream as the second hand car industry, and an increasing cohort of watch lovers no longer buy to hoard, but instead buy with the express intention of trading in the future.
I am not talking about flippers, I am talking about true aficionados for whom the pleasure of meeting fellow enthusiasts (online or in person) and selling one watch to make room for another, is fundamental to the joy of their hobby.
All of which makes investment in Chrono24 look like a solid bet for private equity and the likes of Aglaé Ventures with its links to the global LVMH luxury group.
Private equity will be looking for an exit at some point in the future, which will give Chrono24 a proper valuation. Do not be surprised if that valuation makes it the biggest luxury watch retailer by market capitalisation in the world, and the industry’s first true unicorn to be worth billions of euros.