Could Wallapop Be Barcelona’s First Billion Dollar Startup?

Do you Walla? If you live in Spain it’s highly likely that you already have the secondhand marketplace app Wallapop installed on your phone. Between their cheeky TV ads to their irresistible UI that just lets you keep scrolling, Wallapop has seemingly come out of nowhere to blow past Spain’s long list of competitors in the already crowded classified ads arena. In fact, the company’s rapid growth and secretive fundraising efforts have led some to believe that Wallapop may become the first billion dollar unicorn of the Barcelona startup ecosystem.

Founded in 2013 by seasoned Spanish entrepreneurs Agustín Gómez, Gerard Olive (BeRepublic) and Miguel Vicente (Letsbonus), Wallapop is a peer-to-peer, secondhand marketplace app connecting you to your neighbors and their items for sale. Their early success can be attributed to an incredibly simple user experience and an unrelenting focus on user acquisition, rather than trying to extract revenues on every transaction. In less than 2 years, Wallapop has added more than 5 million monthly active users in Spain, France and the US – an nearly unthinkable feat if part of the onboarding process included attaching your banking or Paypal account information. Nevertheless, the app is extremely addicting, especially if you’re furnishing a new apartment…

#Wallasingles: Identity Crisis or Experiment

In February, my wife and I moved into a new unfurnished apartment in el Born and quickly took to Wallapop to find some odds and ends to help make it feel like home. One encounter for a nice set of leather dining table chairs went like this:

(translated to English)

Wife: Hi, I’m interested in your leather chairs. Would you take €350 for the set?

Guy: Hi, no I’m afraid I already sold them, but what are you doing tonight? #Wallasingles

Okayyy, that’s a little creepy. Why is some stranger on a Craigslist app asking my wife on a date? I had been a Wallapopper (is that what we’re calling ourselves?) for a few months by then so I was fully aware that the app was a P2P marketplace for selling unwanted shit, so why are they pretending to be a dating app?

Then I got an email from Wallapop: “Invite your friends to join #WallaSingles and win $1000”

Wait. Are they seriously trying to be a dating app?! I was perplexed. Why would such viral sensation risk derailing itself by trying to be something it’s not. If you were in a bar, would you really acknowledge someone who was hitting on you but also trying to sell you used furniture in the same breath??

“Hey girl, I got these fine leather chairs just taking up space. Wanna come back to my place and test them out? If you don’t wanna buy ’em maybe we can fool around a little bit and see where it goes…”

Seriously, was that the plan? But the more I thought about it, the more it became clear. Maybe #Wallasingles was just a test. A quick experiment to see if Wallapop has the chops to be a localized social networking platform. A space that marries local ecommerce and social interaction.

“Our experience tells us that users are increasingly those who use the app to discover profiles related to their tastes people based on what they sell through Wallapop . The new collection is merely responding to behavior users perceive, and encourage them to use our platform increasingly creative ways,” says Wallapop CEO and cofounder Agustin Gomez (from Marketing4Ecommerce.com).

That was it. But why stop there? Take Uber for example. Do you think Uber skyrocketed to a $50 billion valuation on the back of its transportation business model alone?  No, once it’s a trusted app on hundreds of millions of smartphones, it has free reign to enter any market it chooses. That’s why it’s raising all that cash. We saw it in Barcelona when they were forced out of the country, they simply pivoted to a food delivery model called UberEats and now they sell out every lunch.

Wallapop seems to be following Uber’s lead and going for a cash grab of its own. Localized P2P ecommerce is just the beginning. Dating, social networking, delivery, hell even transportation and lodging might be on their roadmap. So let the fundraising race begin!

The Funding

While Wallapop is not commenting on the official numbers yet, our friends at Novobrief have outlined Wallapop’s €40M in funding since it’s launch in October 2013. It began with a seed round from Caixa Capital Risc, Bonsai, ESADE BAN, Antai, Grupo Godó and Grupo Zeta, however it was perhaps the ‘media for equity’ deal with Atresmedia early 2014 that shifted the viral gods in their favor.

This traditional marketing blitz set off a chain reaction that has led to more than 5M downloads for the secondhand flea market app and has locked up first place in Spain’s classified ads and mobile-first marketplace industries. The decision to refrain from collecting revenues, while incredibly rare in Spain, is the modus operandi for the new world order of social economy startups. Airbnb, Uber, BlaBlaCar, Instacart, Postmates – they’re all raising obscene amounts of cash to lock up first place in their respective markets. As Seattle-based competitor OfferUp is rumored to be raising upwards of $100 million dollars, Wallapop seems to be following the Ricky Bobby philosophy: If you’re not first, you’re last!

TechCrunch and Expansion have come to slightly higher fundraising calculations for Wallapop, reporting that the $25M Series B last fall led by Insight Ventures was separate from last month’s €40M round for this Barcelona startup. But it doesn’t stop there. Their sources claim Wallapop is about to close a monster €100 million dollar round with Fidelity Growth Partners along with Accel and “multiple super angels”, which could prop their valuation over the heralded billion dollar watermark never before seen in Spain.

What It Means For Barcelona

If Wallapop is indeed raising a $100M+ round directly on the heels of their last €38M round, it puts them and the Barcelona startup ecosystem directly in the global spotlight. Investors (public, VC and private), corporations and entrepreneurs worldwide will take notice. It will solidify the Spanish tech ecosystem as a serious player in Europe and ring the dinner bell for thousands of talented professionals around the world that you can build billion dollar companies from Barcelona.

We’ve been waiting for the confirmation that you CAN attract the necessary talent in Barcelona. You CAN raise the necessary funding with headquarters in Barcelona. You CAN reach the non-Spanish speaking global audience from Barcelona. With a €140 million in bank, we’re about to see Wallapop go on massive talent acquisition spree that funnels high-capacity professionals into the Barcelona startup ecosystem.

It’s validation.

Entrepreneurs Worldwide Listen Up: You CAN build your next venture in Barcelona. If you’re going to devote the next 4-6+ years of your life (and your family’s life) to your next project, why NOT choose Barcelona over other European “tech hubs”? Cost of living? Please. Cost of talent? We have London beat three fold. Quality of life? I’ll leave that up to you.

Investors Worldwide Listen Up: You CAN get in early on the next billion dollar unicorn by tracking Barcelona startups and innovation. I know it’s a pain to invest here, but it’s getting easier every year. Plus, we have people to take care of all the red tape.

Tech Bubble?

We’ll save that for another day. Until then, get in while the gettin’ is good!