Retailers GOAT and Flight Club merge into online sneaker shopping paradise, snag $60 million in new funding
- Online footwear retailer GOAT and sneaker consignment shop Flight Club are merging, but will maintain separate brands.
- The two companies have shaken up the footwear industry and attracted fans among sneaker enthusiasts.
- GOAT, a Y Combinator-backed startup, also announced that it had received an additional $60 million in funding from a round led by Index Ventures.
Online sneaker retailer GOAT announced Thursday it's merging with venerated sneaker consignment shop Flight Club and getting a $60 million cash infusion.
The companies, which focus on coveted, hard-to-find footwear, will each maintain their own brands after the merger, they said in a press release. But GOAT will move Flight Club onto its technology systems.
"The merger ... will allow us to significantly scale our online and retail operations to meet customer demand both domestically and internationally," Eddy Lu, GOAT's co-founder and CEO, said in a statement.
The deal was completed on Tuesday, a GOAT representative said. The companies did not disclose the financial terms of the deal, but a "majority" of the $60 million in new funding GOAT announced will go to purchasing Flight Club shareholders' stakes in the company, Recode reported.
The GOAT representative declined to confirm that, saying only that the deal was done with a mixture of cash and stock.
The two companies have shaken up the shoe wear industry. Their merger was born out of mutual admiration between the two companies, GOAT co-founder Daishin Sugano told Business Insider.
Flight Club, which sells rare and collectible footwear from its two stores in LA and New York, has attracted a cult following among "sneakerheads" since it opened in 2005. Sugano, who owns hundreds of sneakers, said that the iconic store was an inspiration to him early on as he cultivated his own personal footwear collection.
"The reason GOAT exists at all is because Flight Club innovated the market," Sugano said.
GOAT, too, has its share of devoted fans among sneaker enthusiasts. The company's mobile app, which launched in 2015, offers a selection of more than 400,000 unique shoes. GOAT launched its service as a direct competitor to eBay's sneaker offerings, but its goal is to transform the sneaker retail industry.
GOAT is now valued at more than $200 million
"We're innovating the sneaker market with technology," Sugano said. By teaming up with Flight Club, "you have the future of retail," he added.
GOAT's funding round was led by Index Ventures. It values the company at more than $200 million.
Other participants in the round included Upfront Ventures, Accel, Matrix Partners,
and Web Investment Network. Previously GOAT, which has now raised a total of $97 million, had attracted funding from high-profile investors including Andreessen Horowitz and Y Combinator.
GOAT and Flight Club have the opportunity to become leaders in the industry because of the business smarts of their teams and the broad popularity of their websites, Index Ventures partner David Rimer told Business Insider. Combined, their sites attract 15 million visits per month.
"The sneaker market is ... in [its] relative infancy," Rimer said. "The opportunity is really big."