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Swappie bags $40.6M to sell more secondhand iPhones across Europe

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Swappie bags $40.6M to sell more secondhand iPhones across Europe

Finland-based Swappie has closed a €35.Eight million ($40.6M) Series B to develop into new markets in Europe. The ecommerce enterprise refurbishes and resells used iPhones, taking good care of all the course of from testing and repairing used handsets, to promoting the refurbished units through its personal market, with a 12-month guarantee.

Local VC and personal fairness agency TESI is a brand new investor within the Series B, together with Lifeline Ventures, Reaktor Ventures and Inventure Investors, all of whom participated in Swappie’s 2019 Series A. The whole raised to this point because the enterprise was based in 2016 is $48M.

Right now Swappie operates in Finland, Sweden, Denmark and Italy. The new financing shall be used to develop throughout Europe, starting with launches in Germany, Ireland, Portugal and the Netherlands this summer season.

It’s additionally eyeing enlargement past Europe — so shall be speccing out a broader roadmap for the long run.

“The important focus of this spherical is to develop into the primary participant in Europe. But additionally to discover alternatives outdoors Europe as nicely,” says CEO and co-founder Sami Marttinen. “That’s one thing we shall be trying into however no concrete plans to announce at this level.

“There are nonetheless alternatives for our enterprise mannequin all over the place on the planet. So it’s a matter of simply constructing the roadmap — the place to go subsequent.”

Swappie’s Jiri Heinonen (CMO) and Sami Marttinen (CEO) (Photo credit score: Swappie)

Swappie touts rising shopper demand within the area to purchase refurbished telephones, saying that from 2018 to 2019 revenues grew 4x, hitting $35M+ in internet income in 2019. It’s additionally seeing demand persevering with to develop this 12 months — recording a 5x enhance in internet income progress in April and May 2020 vs the identical interval final 12 months, regardless of the continuing COVID-19 pandemic. Indeed, the development of customers shifting to purchasing extra on-line appears to be a assist for its on-line market.

Commenting on Swappie’s Series B in an announcement, Tony Nysten, Investment Manager at TESI, stated: “We imagine there’s a large progress alternative for Swappie. The smartphone market in Europe is value over €100BN however used or refurbished telephones at the moment make up simply over 10% of that and just one in 4 pre-owned telephones are at the moment re-sold. Through its fast progress to this point, Swappie has confirmed its potential to not simply develop market share inside the refurbished market, however to develop the dimensions of the class total. The enterprise has monumental potential.”

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Swappie’s early alternative of market focus included not solely acquainted turf within the Nordics — however Italy, in Southern Europe. The latter was chosen intentionally on account of it being a tricky marketplace for ecommerce, per Marttinen.

“In the actually early days the rationale why we went to Italy was as a result of it was one of many hardest ecommerce markets in Europe — they’ve a extremely low ecommerce maturity index. It’s very totally different by way of buying habits. You have to construct one other degree of belief in that market. There are a lot of distinctive traits like money on supply, issues like that. So we knew that in an effort to actually conquer the market globally — and to have the ability to ship on our international ambitions we would want to enter as troublesome markets as early in our journey as doable.

“These days we’ve a way more superior playbook and market research throughout Europe.”

Swappie describes itself as a ‘scale-up’ tech enterprise on account of addressing the entire worth chain, per Marttinen.

“We’ve executed loads there on the {hardware} aspect — in relation to really refurbishing the units we will make them even stronger then the unique units in lots of circumstances. So meaning we will go as deep as onto the motherboard degree within the repairs. Then on the software program aspect, in fact, we’re making promoting and distribution and every part else scalable. Making certain that the checking processes and all of the processes within the manufacturing facility are in line with the newest requirements,” he says.

“Because of being so targeted in additionally constructing the processes and specializing in the standard a lot, so really we’ve been in a position to actually change the best way individuals devour electronics,” he provides. “If you consider it from a neighborhood participant perspective they’re sometimes principally competing for the people who find themselves already shopping for used units — whereas we’re in a position to ship on this market by having full management of all the worth chain, from shopping for to refurbishing, to promoting the telephones to customers.

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“Most of our prospects are shopping for used or refurbished units for the primary time — so really our greatest opponents are new smartphone retailers.”

The hottest iPhone mannequin bought on Swappie’s market final 12 months was the iPhone 8, per Marttinen.

He received’t disclosed the precise variety of iPhones Swappie has refurbished and bought at this level however he says it’s a six-figure quantity — aka ‘a whole lot of 1000’s’. 

The crew selected to concentrate on iPhones to make sure they’ll ship the best high quality machine refurbishment, he says, whereas additionally benefiting from the comparatively greater price of Apple’s smartphone {hardware} vs Android units. Though he doesn’t rule out increasing to supply one other sort of refurbished smartphone in future.  

“The enterprise is now rising actually quickly however what we observed within the early days is that the brand new machine costs had began to rise earlier than we began this enterprise so we’ve been very fortunate with the timing,” he tells TechCrunch, noting that Swappie additionally benefitted from the plateauing into developments between handset fashions in recent times, because the expertise matured.

“If you possibly can construct belief into this enterprise, and guarantee that the telephones operate in addition to new units — and that you simply’re really making the shopping for course of in addition to protected as shopping for a brand new telephone — that means you possibly can really speed up the expansion of the market. So that’s what we’ve been actually profitable in. It’s form of the important thing to having the ability to develop so shortly.”

“One important level there was that as a result of we refurbish each machine ourselves in our personal manufacturing facility in Finland we will ship to prospects the best high quality units beneath guarantee for a lot lower than the price of a brand new telephone and likewise be extra environmentally pleasant,” he provides.

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While, in years previous, there have been situations of iPhone customers’ units bricked after a restore by an unauthorized restore store Marttinen says Swappie is utilizing solely unique iPhone elements so has averted such issues.

He additionally factors to latest European Commission proposals for a pan-EU ‘proper to restore’ for electronics which suggests machine makers promoting within the area shall be required to respect repairability, relatively than utilizing software program updates as a strategy to penalize customers who search to increase the lifespan of their present machine.

1592312954 221 Swappie bags 40.6M to sell more secondhand iPhones across Europe

Photo credit score: Swappie

Swappie’s enterprise additionally slots right into a wider Commission mission to transition the EU to a round financial system, as a part of the inexperienced deal introduced by present president, Ursula von der Leyen — so it’s skating to the place the puck is headed, when you like.

“It’s actually good for the atmosphere that the proper to restore laws has come ahead up to now few years. That’s one essential level for us as nicely which was one of many explanation why we wished to constructed microscope degree repairs in our factories — so we wouldn’t must scrap as many telephones as you usually would,” Marttinen provides.

What can’t it restore? The proportion of iPhones which develop into actually unsalvageable through its processes is “extraordinarily small“, he says. “We can really do any repairs which are doable to do the telephones so, principally, water broken telephones which have been on the backside of the ocean — these are in fact unrepairable. Or if the telephone is bent an excessive amount of or if the motherboard is totally ruined. But principally all the opposite faults we will restore.”

On the aggressive entrance, he says Swappie’s important rival are retailers promoting new iPhones — given it’s making an attempt to woo iOS customers away from shopping for a model new iPhone. On the secondhand market entrance Marttinen mentions reBuy as one of many important rival gamers in refurbishing and reselling electronics, although it doesn’t concentrate on iPhones — providing a full vary of units, from wearables to smartphones and tablets, laptops, consoles and cameras.

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