StockX, the company styling itself as the “Stock Market of Things,” is worth $1 billion after its latest ¬Series C round, which closed in July. Now that it’s a “unicorn,” with a total of $160 million raised, the company has investors in New Balance and Skechers alike scratching their heads, wondering “What is StockX?”
Cofounded in 2015 by Josh Luber and Quicken Loans billionaire Dan Gilbert, StockX has fully appropriated Wall Street lingo to resell sneakers, streetwear, handbags, and wristwatches. Buyers place “bids” on specific items, sellers set “ask” prices, and historical highs and lows are shown in 52-week increments. Purchases are automatically triggered when a “bid” and “ask” are aligned for a specific product.
StockX serves as a clearinghouse, with inspectors on staff to verify the authenticity of the item. But as the company grows, it will need to ramp up its verification efforts. Currently, this process is largely by touch, as StockX inspectors identify fakes using dozens of parameters, including product packaging, stitching, and even smell, alerting other inspectors via text message. Manufacturers of fake sneakers are constantly improving and adjusting their processes, and this cat-and-mouse game will continue to be played by companies promising to verify products and those selling increasingly passable fakes.
The sneaker resale market is currently worth $2 billion per year, and though it is the largest player, StockX is not alone in pursuing it. Other companies, such as Goat, Grailed, and Kixify, all offer similar marketplace and verification services. But when it comes to scoring the hottest sneakers, inventory matters, and right now, StockX is leading the pack.
A version of this article appears in the August 2019 issue of Fortune with the headline “The Billion-Dollar Sneaker Empire.”