Finland-based Swappie has closed a EUR3 5.8 million ($ 40.6 M) Series B to expand into brand-new sells in Europe. The ecommerce business refurbishes and resells worked iPhones, taking care of the entire process from testing and repairing utilized handsets, to selling the refurbished devices via its own marketplace, with a 12 -month warranty.
Local VC and private equity firm TESI is a new investor in the Series B, along with Lifeline Ventures, Reaktor Ventures and Inventure Investors, all of whom participated in Swappie’s 2019 Series A. The total fostered to date since the business was founded in 2016 is $48 M.
Right now Swappie operates in Finland, Sweden, Denmark and Italy. The new financing will be used to expand across Europe, beginning with propels in Germany, Ireland, Portugal and the Netherlands this summer.
It’s also eyeing expansion beyond Europe — so will be speccing out a broader roadmap for the future.
” The primary focus of this round “il become” the number one player in Europe. But too to explore opportunities outside Europe as well ,” says CEO and co-founder Sami Marttinen.” That’s something we will be looking into but no concrete plans to announce at this point.
” There are still the possibility for our business pattern everywhere in the world. So it’s a matter of merely building the roadmap — where to go next .”
Swappie brags growing consumer demand in the region to buy refurbished telephones, saying that from 2018 to 2019 incomes stretched 4x, touching $35 M+ in net revenue in 2019. It’s also picturing necessitate continuing to grow this year — recording a 5x increase in net receipt growth in April and May 2020 vs the same period last year, despite the ongoing COVID-1 9 pandemic. Indeed, the trend of consumers shifting to buying more online sounds to be a help for its online marketplace.
Commenting on Swappie’s Series B in a statement posted, Tony Nysten, Investment Manager at TESI, said: “We believe there is a huge growth opportunity for Swappie. The smartphone marketplace in Europe is worth over EUR1 00 BN but expended or refurbished phones currently even up really over 10% of that and simply one in four pre-owned phones are currently re-sold. Through its rapid growth to date, Swappie has proven its ability to not just grow market share within the refurbished busines, but to expand the size of the category overall. The business has enormous potential.”
Swappie’s early pick of sell focus included is not simply familiar gras in the Nordics — but Italy, in Southern Europe. The latter was chosen deliberately on account of it being a tough busines for ecommerce, per Marttinen.
” In the really early days the reason why we went to Italy was because it was one of the toughest ecommerce sells in Europe — they have a really low ecommerce maturity index. It’s very different in terms of supermarket behaviour. You need to build another level of trust in that market. There are lots of unique traits like cash on transmission, things like that. So we knew that in order to really conquer the market globally — and to be able to deliver on our world-wide ends we would need to enter as difficult groceries as early in our travel as possible.
” These periods we have a much more advanced playbook and sell studies across Europe .”
Swappie describes itself as a’ scale-up’ tech business on account of addressing the whole value chain, per Marttinen.
” We’ve done a great deal there on the equipment place — when it comes to actually refurbishing the designs we can start them even stronger then the original designs in many cases. So that means we can go as deep as onto the motherboard level in the amends. Then on the software area, of course, we’re making selling and dissemination and everything else scalable. Made to ensure that the checking processes and all the processes in the factory are according to the latest standards ,” he says.
” Because of being so focused in too constructing the processes and focusing on the quality so much, so actually we have been able to truly change the channel beings down electronics ,” he adds.” If you think about it from a neighbourhood participate position they are typically primarily rivalling for the people who are already buying exploited maneuvers — whereas we are able to deliver on this busines by having full sovereignty of the entire ethic order, from buying to refurbishing, to selling the phones to consumers.
” Most of our purchasers are buying employed or refurbished inventions for the first time — so actually our biggest competitors are new smartphone retailers .”
The most popular iPhone model sold on Swappie’s marketplace last year was the iPhone 8, per Marttinen.
He won’t disclosed the exact number of iPhones Swappie has refurbished and sold at this station but he says it’s a six-figure figure — aka’ hundreds of thousands ‘.
The team chose to focus on iPhones to ensure they can deliver the highest quality device refurbishment, he says, while also benefiting from the relatively higher cost of Apple’s smartphone hardware vs Android inventions. Though he doesn’t rule out expanding to offer another type of refurbished smartphone in future.
” The business is now germinating certainly rapidly but what the hell is noticed in the early days is that the new maneuver expenditures had started to rise before we started this business so we have been very lucky with the timing ,” he tells TechCrunch , noting that Swappie also benefitted from the plateauing into advancements between handset prototypes in recent years, as information and communication technologies matured.
” If you can build trust into this business, and make sure that the phones function as well as new designs — and that you’re actually fixing the buying process as well as safe as buying a new phone — that acces you can actually accelerate the growth of the market. So that’s what we have been really successful in. It’s kind of the key to being able to grow so quickly .”
” One main point there has been that because we refurbish every invention ourselves in our own mill in Finland we can deliver to purchasers the highest quality inventions under assurance for much less than the cost of a new telephone and likewise be more environmentally friendly ,” he adds.
While, in years past, there have been instances of iPhone users’ inventions bricked after a amend by an illegal repair shop Marttinen says Swappie is using only original iPhone places so has avoided such problems.
He also drawn attention to recent European Commission proposals for a pan-EU’ right to reparation’for electronics which suggests design makes selling in the region will be required to respect repairability, rather than using software updates as a mode to penalise consumers who seek to extend the lifespan of their current device.
Swappie’s business too slots into a wider Commission mission to transition the EU to a circular economy, as one of the purposes of the light-green distribute announced by current president, Ursula von der Leyen — so it’s skating to where the puck is leader, if you like.
” It’s really good for the environment that the right to repair legislation has come forward in the past few years. That’s one very important point for us as well which was one of the reasons why we wanted to constructed microscope tier mends in our mills — so we wouldn’t have to scrap as countless telephones as you ordinarily would ,” Marttinen adds.
What can’t it amend? The balance of iPhones which turn out to be truly unsalvageable via its processes is” particularly small-scale”, he says.” We have been able to do any amends that are possible to do the phones so, mostly, ocean marred telephones which have been at the bottom of the ocean — those are of course unrepairable. Or if the phone is bent too much or if the motherboard is completely devastated. But basically all the other faultings we can repair .”
On the competitive figurehead, he says Swappie’s main competitor are retailers selling new iPhones — opened it’s trying to woo iOS consumers away from buying a brand new iPhone. On the secondhand marketplace front Marttinen mentions reBuy as one of the main competitive actors in refurbishing and reselling electronics, though it does not focus on iPhones — provide a complete range of machines, from wearables to smartphones and tablets, laptops, consoles and cameras.
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