Case Study

Footway

Footway is the leading online footwear retailer headquartered in Stockholm.

Founded by Daniel Mühlbach, the former owner and co-founder of Lensway (contact lenses online) which he built to SEK 500 million in sales.

Business overview

  • Footway is today the leading online pureplay for footwear in Northern Europe
  • Footway currently offers 30,000 different shoe styles and 60 different brands
  • The addressable market for shoes in the Nordics is about SEK 30 billion with a low online penetration of approx. 10%, which is expected to increase to 25-30% in 2020. The online penetration in the US is about 20-25%

Key achievements

  • Best-in class IT system infrastructure with 150+ integrated applications
  • Significant focus on automating business processes:
    • Warehouse automation increasing efficiency and flexibility
    • Sourcing algorithms that efficiently, with AI and machine learning balancing product supply with demand
    • Fully integrated marketing automation solution enabling significant scaleup without meeting marketing inefficiencies i.e. the marginal cost of a new customer remains the same over time
  • One of few companies in Europe with complete real time automatic integrations with Facebook and Google
  • Strengthening of the management team and Board of Directors
  • Increase in working capital to allow for broader selection of products and expansion international expansion outside of Sweden
  • Two strategic acquisitions (Heppo in Apr-13 and Brandos in Dec-13)
  • IPO on Nasdaq First North in Stockholm on December 20, 2018

Many of our investment criteria where met when we invested in Footway

  • Fill 86Created with Sketch. Digital business model
  • Fill 86Created with Sketch. Strong organic revenue growth and high gross margins
  • Fill 86Created with Sketch. EV target size in Fund II (SEK 60-150 million)
  • Fill 86Created with Sketch. Large addressable market with a low online penetration expected to rapidly increase
  • Fill 86Created with Sketch. Strong and coachable management team
  • Fill 86Created with Sketch. Low average customer acquisition cost enabling Footway to experience strong organic growth under profitability
  • Fill 86Created with Sketch. Strategic fit with portfolio
  • Fill 86Created with Sketch. Potential to generate over 4.0x of invested capital
  • Fill 86Created with Sketch. Wow-factor

Sales per market (Q4 2019)

28% of 2019 sales are from outside Nordics vs. 12% in 2018

Historic sales development

Footway has experienced very strong organic growth since eEquity invested in Dec-11. On average sales has grown 119% per year from 2011-2018, and the growth is expected to continue going forward.