The combined company has raised $60 million from Index Ventures. But the most of those funds will be used to pay out those who own shares in Flight Club, according to sources familiar with the transaction, making it seem as if GOAT is acquiring Flight Club. While Flight Club is profitable, it has never raised money from outside investors.
As a retailer with more than a decade of operations, Flight Club has a loyal and enthusiastic worldwide fan base of sneaker enthusiasts. GOAT, meanwhile, has become a popular mobile shopping app that sells sneakers that consumers can’t always find elsewhere.
“[Flight Club is] best in class at retail, have great [search engine optimization] to their web presence and tons of social following,” GOAT co-founder and CEO Eddy Lu told Recode.“We’re great on technology, great on mobile and don’t have stores.” Lu added: “The pieces of the puzzle perfectly fit together.”
Lu will run the combined company, while Flight Club founder Damany Weir will become its chief strategy officer. Flight Club will keep its two stores – one in New York and the other in Los Angeles – under its name and will continue to run FlightClub.com. In addition, GOAT will keep running its website and app.
The news comes as footwear sales have grown at a higher rate than the rest of the apparel industry since 2010, growing at a compound annual growth rate (CAGR) of 6 percent from 2010 to 2015, compared to just 4 percent CAGR for the rest of the apparel industry, according to Euromonitor.
And the demand for new shoes — especially sneakers — doesn’t appear as though it will slow down anytime soon, as TechNavio Infiniti Research forecasts the global footwear market will reach $216 billion in sales by 2019.