iDeal of Sweden was founded by Joachim Lindström and Filip Ummer in 2013, both have experience from the telecom sector.
The company is headquartered in Norrköping where it was founded, but they also have an office in Stockholm. The brand sells fashion tech accessories via own e-commerce and retailers globally.
Investment overview
iDeal of Sweden was founded in 2013 by Joachim Lindström and Filip Ummer, both with experience from the telecom sector and a clear vision for the future trends of smartphone use
iDeal sells fashion tech accessories via own e-commerce, concept stores and leading wholesale partners
eEquity was impressed by iDeal’s innovative use of social marketing as a go-to-market methodology with a data-driven approach to influencer marketing, a framework with which other eEquity portfolio companies have subsequently benefitted greatly
In iDeal, eEquity found a pioneer in the vast market of fashion tech accessories, an attractive and fast-growing intersection of technology and personal expression. With only 25% of sales from own e-commerce at entry, eEquity recognised a significant opportunity for online expansion enabled by the eEquity toolbox (successfully reaching over 75% e-com share during the holding period)
COVID-related market lockdowns have negatively impacted iDeal’s omni-channel approach, fashion accessories segment and product strategy, resulting in a (6%) LTM revenue decline in Q3’21. eEquity is expecting bounce-back as retail channels reopen and fashion segments recover in key markets
Key achievements
- Tapping into two huge markets, USD 80bn market for mobile accessories and USD 1,8tn for fashion and accessories, quickly establishing the brand as a pioneer in fashion tech accessories with 14 product categories and >1,000 SKUs
- Building a strong consumer brand, highly visible across all social media channels with close collaborations with relevant macros and micro influencers in key markets
- Shifting to a strong D2C proposition with >60% of sales via own channels today whereas only 25% of sales were from e-commerce three years ago
- Global presence with 20+ localised websites and a network of >10,000 retailers
- Optimisation of customer acquisition, online marketing, supply chain and processes by quickly implementing best practices from eEquity’s other portfolio companies
- Development of business infrastructure, building a highly data driven organisation lead by a strong leadership team
- In Jun-19, eEquity sold 60% of its holding in iDeal after 2 years, generating 5.0x of its invested capital and with potential to earn 9.4x if full earn-out is achieved (after transaction costs)
Many of our investment criteria were met when we invested in iDeal
- Digital business model
- Sales between SEK 50-200 million
- Profitable or close to profitability with a proven business model
- Strong organic revenue growth and high gross margins
- Strong and coachable management team
- Large addressable market with a low online penetration
- Strategic fit with portfolio
- Potential to generate over 5.0x of invested capital
- Wow-factor
Historic sales development
Rolling LTM EBITDA since acquisition (SEKm)
Key strategic initiatives and value creation
Built a strong consumer brand, visible across social channels with relevant micro and macro influencers. Paid social and influencer marketing is now datadriven and partly automated with new attribution models
Significantly increasing the share of sales through own D2C e-commerce (>80% in 2021)
All IT has been replaced with best of breed microprocesses and all business processes have been reengineered based in simplicity, scalability, automation and incrementality
Expansion of product assortment into new product categories such as chargers, wallets, clutches, ring-mounts and bags. “Product Coverage Ratio” has been implemented to ensure equilibrium of supply and demand
Developed the company from 11 FTE to 140 FTE with a fully-fledged senior management team now in place
In 2019, eEquity exited 60% of its stake to Altor (5.0x return) after a 22-month holding period