About a decade ago, Donghwan Kim helped his cousin, a potter, look for sales channels, such as flea markets, to sell his ceramics. But they had a hard time finding a suitable platform, so after about a year, Kim decided to create a marketplace for handmade goods himself in South Korea called Backpackr.
Today, Backpackr, which operates a handmade marketplace called idus, raised a $16 million (20 billion won) extension to its Series C funding, two and a half years after its first Series C, which was $24 million ( approximately $30 billion) Won).
The startup is now valued at about $240.1 million after money, according to sources familiar with the situation. Backpackr said it has raised a total of $56.8 million since its inception in 2012, but declined to disclose its valuation. Returning investor Altos Ventures led the expansion alongside Stone Bridge and new investors Axiom Asia and Vanderbilt University.
The new capital will help Backpackr make inroads into Southeast Asia, including Singapore, Hong Kong, Taiwan, Indonesia, Thailand, Vietnam, Malaysia and the Philippines, in the second quarter of this year with an ambition to become the Etsy of Asia, Kim said in an interview with TechCrunch. Backpackr also plans to use the proceeds to invest in R&D to advance its artificial intelligence-powered search and recommendation system, as well as hire more staff.
The startup intends to sell products made in South Korea overseas and bring handmade products made in Southeast Asia to South Korea via its platform. Other countries such as Japan and the United States are on the radar for the following destinations, according to Kim. Backpackr has to compete with other handmade marketplaces in Asia such as Japan-based Minne and Creema, Taiwan-based Pinkoi and Singapore-headquartered Carousell. The market size of Asia’s handmade products is expected to reach $307.8 billion in 2027up from $149 billion in 2021.
The company not only has idus as a primary business, but also operates a crowdfunding platform called Tumblebug which they acquired in 2020. Backpackr has also launched a Patreon-like subscription service for creators, Steadio, to connect artists with their fans, Kim said. Backpackr’s model is to aim for a one-stop-shop platform for creators, which is the company’s key differentiator, Kim pointed out.
“We want to make it a one-stop-shop platform for creators and allow our users (creators) to open their own online stores selling their crafts, including handicrafts and all things homemade such as bakery, soap, candles, jewelry, fragrances, bags, furniture, home decor and art, help them crowdfund their products and connect creators with fans to offer online or offline classes,” Kim told TechCrunch.
Backpackr, which had about 60,000 creators last November, says it passed $804 million in gross merchandise volume in November and passed a break-even point in the second half of last year, although it still posted a loss in fiscal 2022 .The outfit expects to generate profits this year, Kim said.