How Refurbed Became Europe’s Fastest-Growing CleanTech Startup

Did you know that tech-obsessed humans generate over 40 million tons of electronic waste every year? What’s worse is that e-waste comprises 70% of the global toxic total waste. This complicates traditional recycling.

But as an old adage goes: One man’s trash is another man’s treasure. Or better yet — an idea for a new venture as it appears to be with Refurbed.

The five-year startup, backed by the likes of angel investor Michael Altrichter and VC firms like Evli Growth Partners and Almaz Capital, wants to become a European “Amazon” for refurbished electronics.

That’s an ambitious goal. Consumer perception of second-hand products has always been ambiguous. When the startup was founded in 2017, 69% of surveyed consumers said they wouldn’t be buying a pre-owned phone even with warranties and insurance included.

Yet, despite the initially low intention to purchase pre-owned goods, Refurbed managed to scale to over 815,000 customers across 9 European markets, cementing its position as a category leader.

So how did this brand manage to change consumer attitudes toward preloved e-goods? Here’s the story and several lessons other markets can apply.

Unwiring Refurbed Success Story

Source: Refurbed

Refurbed is a Vienna-born project, co-founded by Kilian Kaminski, Jürgen Riedl, and Peter Windischhofer in 2017. As the story goes, Windischhofer once purchased a pre-owned smartphone from an online website. It broke several weeks later. As there was no warranty, Windischhofer had to pay out of pocket for a new device.

After having this frustrating experience he came up with a unique value proposition — a marketplace of pre-vetted consumer devices with reassuring quality guarantees. He pitched the idea to his friends, Kilian Kaminski and Jürgen Riedl — and work began on the Refurbed prototype.

The team had an “unfair” advantage. Kaminski was the head of “Refurbished Products” at Amazon Germany at that time and had substantial operational knowledge in the industry. Windischhofer, in turn, was a digital consultant for McKinsey with experience in brand marketing and new product development. Riedl was a seasoned IT engineer and entrepreneur on the side.

Together, they made an expert team, bound for success — and it soon followed. As Kaminski recounted on his blog:

"In the first month after launching an MVP, we were already able to generate first sales and could increase our product portfolio to around 300 different items, from phones, laptops to tablets, and headphones. In addition, we were able to learn many insights about customer behavior as well as feedback from sellers."

In roughly three months, the team presented their startup to a jury of Munich Re, ERGO, and Climate-KIC executives. Early traction, paired with a “green” ethos, left the panel impressed and led to a placement in the prestigious ClimAcceletaror program, backed by the European Commission and private entities.

With even greater support, Refurbed's operations picked up speed. The initial USP turned into the brand’s cornerstone message of “40% cheaper and 100% environmentally friendly” gadgets.

A refurbished device has 39%-60% less environmental impact than a newer one. Refurbed offsets the remaining ≈40% through its “Plant a Tree” program. Each device sale funds tree planting in Haiti, Madagascar, Nepal, and other corners of the world.

Source: Refurbed

Refurbed also worked hard to change consumer attitudes towards pre-loved electronics. To overcome quality-related objections, the team developed a meticulous 40-steps device verification process. That’s on top of only buying gadgets from certified retailers, rather than individual sellers.

To further forge trust with consumers, Refurbed also added a free 12-month warranty against any device issues or breakdowns. Combined, these two factors lent them greater legitimacy — and progressively built up its brand equity.

In 2018, Reburbed appeared on national television at a startup show “2 Minuten 2 Millionen” (an Austrian version of Shark Tank). Yet another impressed judge panel gave them a €500,000 check, estimating the entire idea to be worth over €3 million. The appearance also led to a sizable boost in brand awareness across German-speaking markets. 70% of Refurbed sales came from Austria and Germany.

The same year, Refurbed also won a Green Alley Award, which recognized the platform for its contribution to the circular economy.

The positive recognition streak culminated with Refurbed raising the largest seed investment round (€2 million) ever made in Austria. Peter Windischhofer and Kilian Kaminski also got included in the Forbes 30 Under 30 lists for Europe as two forward-thinking, “green” entrepreneurs — and their company became synonymous with “Europe’s fastest-growing online marketplace for refurbished products”.

Refurbed closed 2019 with a reported €45 million in gross merchandising volume, a 5X increase in sales, and some 150,000 customers across European markets.

In 2020, Refurbed raised $17 million in Series A funding. Extra cash went straight into market expansion and merchandise volume expansion. The marketplace also added more retailers to its vetted networks.

Refurbed brand marketing strategy remained focused on cultivating positive associations around refurbished electronics. Given that its gross merchandising volume grew to €100 million in that year, Refurbed definitely succeeded in decoding customer behaviors and shaping their perception.

Cut to 2021, Refurbed raised another funding round of $54 million. By this time, the company already developed a strong presence in Italy, Poland, and France, with Ireland being the next target market. Peter Windischhofer mentioned having €10 million allocated specifically for Irish marketing campaigns.

Additionally, the raised capital went into expanding the product categories. Refurbed added household appliances, e-mobility devices, gaming consoles, and TVs to the mix, sourced from some 130+ merchants.

Source: Refurbed Press Kit

By 2022, Refurbed has reached 20,000 Irish households — an admirable result for one year — and is now eying up other countries for expansion with Amazon-like speed.

With the sizzling demand for sustainable products among European consumers, Refurbed is well-positioned to maintain its break-neck growth streak.

Brand Growth Lessons from Refurbed

Refurbished electronics have been around for decades, but they previously had a hard time winning mainstream affection.

For many, pre-loved electronics sold online or in-person appeared as either “an option for the poor”, “likely scam”, or “low-quality stuff”. Even at present, studies have found that visual or text information about prior use of refurbished electronics has a negative effect on consumer evaluation. As well, consumers are increasingly worried about purchased products’ characteristics such as functions, battery health, and visual appearances.

At the same time, not all consumer segments are open to the idea of even considering recycled goods in the first place. Though the proportion of “resistors” and “adopters” is progressively evening out as younger demographics shift to more conscious consumption.

Negative brand associations and low consideration levels are the common brand marketing challenges that circular and recycling-driven companies face. Refurbed managed to effectively address them with these three strategies.

1. Pursue Core Audiences First

New brands need to show market traction in order to grow further. Engaging sustainability-oriented target audiences is the easiest way to secure initial brand awareness and translate it into early sales figures.

Refurbed rightfully chose to increase its brand awareness among prospects who already understood the problems of e-waste. For instance, seven in ten Irish consumers say they’d buy refurbished e-goods to reduce their environmental impact.

For such audiences, Refurbed appeared as a great choice because of the company’s environmental and quality commitments. The “Plant a Tree” campaign acted as a sweet extra. A consumer not only took care of the planet by buying pre-loved but also offset any further impacts by sponsoring reforestation. These coupled benefits likely helped shoppers develop a preference for Refurbed, which later translated to advocacy.

Additionally, Refurbed used TV/social media videos to educate other audiences about the benefits of second-hand electronics. The quick reels transmitted one simple message: Buying pre-loved is easy, safe, and good for the planet.

The Takeaway? Identify your ideal target audiences. Let them become the early adopters and direct them to help you seed your core brand values to others. To grow a purpose-driven brand, you need to have a vocal community of advocates, who’re ready to promote your cause together with you.

Refurbed gives consumers extra reasons to get excited about shopping for refurbished electronics by supporting reforestation efforts. Too Good To Go rallies consumers around the shared cause of reducing food waste, while Tony’s Chocolonely seeks equality in the chocolate industry.

Choose a hill you want to defend — and make it part of your brand story.

2. Overcome Customer Objections

People are naturally concerned about buying second-hand goods, especially electronics (since e-devices tend to lose performance characteristics as they age).

From day one, Refurbed has to work with those objections and dispel doubts. This “myth-busting” is a huge part of their operations and brand marketing. On the supply side, the platform only accepts goods from pre-vetted retail partners. Each new device then goes through a 40-step inspection process within their network of professional refurbishers.

In an interview with Utopia, Kaminski described their back-office operations as “quasi-professional factories, looking closer to a lab. Refurbishers work in smocks and hairnets, professionally taking care of up to 10,000 devices per week”.

On the customer-facing side, Refurbed also focuses on forging trust in the quality of purchased goods. Their website has ample social proof in form of customer reviews, “as seen on” badges, and constant reassurances that refurbed™ devices are “like new, only better”.

Source: Refurbed

And those aren’t just some empty marketing claims. Refurbed customers also get a 12-month warranty on all devices and a 30-day no-questions-asked return period. Not all regular retailers have equally lavish terms.

Takeaway? Persuasion plays an important role in brand marketing. But persuasion is impossible without trust. Refurbed invests ample resources in educating consumers on their refurbishing process, end-product quality, and performance characteristics.

And there’s something for every doubter — social proof, money-back guarantees, detailed product guides, and product unboxing videos, which show that there’s no difference between a spanking new and refurbed™ product.

3. Transform Your Purpose Into Action

Similar to pre-loved clothes marketplaces like Vinted or thredUP, Refurbed has to nudge consumers into changing their shopping habits. This step is crucial for eventually securing a bigger customer base. That’s no small or fast task. But Refurbed remained committed to creatively promoting its agenda of reducing e-waste, one cognizant brand message at a time.

This year, Refurbed launched a particularly impactful campaign for the German-speaking market, which sounds like “Do I need this?”. The main objective of the campaign is to make consumers more aware of the downsides of conspicuous consumption — and perhaps consider changing their behaviors.

Refurbed set up a new Fix Our Planet portal where the general public can learn more about their environmental impacts and eco-activists — join the action.

As part of the campaign, Refurbed promises to plant a tree for each social media post with #FixOurPlanet hashtag. So far, the campaign resulted in some 13,000 trees planted — and more positive sentiments cultivated around the Refurbed brand.

The Takeaway? Purpose-driven brands naturally drift towards social activism. Such fiery campaigns can lead to higher brand awareness and recall (while also driving the promoted agenda).

The possible downside, however, is staying 100% true to your claims. Because the slightest indication of "greenwashing" or other wrongdoing can easily turn your vocal supporters into the biggest brand critics. Or even lead to regulatory action as is now the case with ASOS.

Final Thoughts

Refurbed was among the first to recognize pre-loved electronics as an unoccupied niche with a “conscious” component to it. But as most pioneers, the marketplace also had to deal with the most resistance. Consumers were reluctant to shop second-hand — and Refurbed threw a lot of effort into persuading them otherwise.

The present-day market dynamics are different because European consumers are more attuned toward conscious shopping. Some 40% rank sustainability as a “highly important” quality for a brand.

At the same time, the rising cost of living and inflation will likely further affect consumers' attitudes toward cheaper and greener product options. This could give rise to more circular companies like Refurbed and prompt general retailers to link cause and cost-savings in their brand marketing.