New marketplace gets seed funding ahead of secondhand smartphone boom

Earlier today, Indonesia-based used phone ecommerce site Laku6 announced a seed funding round of an undisclosed amount. It launched just two months ago.

The investment was led by Singapore-based Golden Gate Ventures (GGV) and followed by several local angel investors including Andy Zain, managing director of local VC firm Mountain Kejora.

“Laku6 is positioned for growth in emerging markets, where increasingly more people are looking to upgrade from their first basic smartphones to something better,” says GGV founding partner Jeffrey Paine. “Buying pre-owned is an affordable solution; it is a unique and untapped opportunity.”

Laku6 co-founders Alvin Yap and Heng Shing Kae have a decent track record in the tech industry. Alvin is the founder and former CEO of TheMobileGamer, maker of the now defunct browser-based KotaGames mobile platform. Alvin has also been a mentor at the Founder Institute for nearly six years. Shing was the CTO and lead engineer at TheMobileGamer. The team hasn’t clarified whether TheMobileGamer is still operating.

See: KotaGames portal to shut down, TheMobileGamer’s future unclear

Used phones becoming big business

Regardless, it seems Alvin and Shing have hit the ground running with Laku6. “We’re deeply convinced that Laku6 must exist to make buying and selling used phones a much safer and simpler experience,” says Alvin. “This new injection of capital empowers us to continue helping our users upgrade their devices at affordable prices.”

Laku6 claims to analyze more than 10,000 seller posts from online marketplaces each day to provide users with the latest prices on secondhand smartphones. To help users better understand the online used phone market, Laku6 says it has ramped up efforts and analyzed over 1 million posts in the past 100 days.

60 percent of global consumers are replacing their smartphones because they are interested in additional functionality or they “just want” a new device, says a recent Gartner survey. Consequently, the worldwide market for refurbished phones being resold will grow to 120 million units by 2017, with an equivalent wholesale revenue of around US$14 billion. This is up from 56 million units in 2014, with an equivalent wholesale revenue of US$7 billion.

Do you think the used phone business is worth pursuing in emerging markets like Indonesia? Is buying used phones a trend that will also catch on in the middle-class affluent crowd? 

Editing by Steven Millward and Michael Tegos; lead image from Wikimedia