Published On: Sat, Jun 20th, 2020

Swappie bags $40.6M to sell some-more secondhand iPhones opposite Europe

Finland-based Swappie has sealed a €35.8 million ($40.6M) Series B to enhance into new markets in Europe. The ecommerce business refurbishes and resells used iPhones, holding caring of a whole routine from contrast and correct used handsets, to offered a refurbished inclination around a possess marketplace, with a 12-month warranty.

Local VC and private equity organisation TESI is a new financier in a Series B, along with Lifeline Ventures, Reaktor Ventures and Inventure Investors, all of whom participated in Swappie’s 2019 Series A. The sum lifted to date given a business was founded in 2016 is $48M.

Right now Swappie operates in Finland, Sweden, Denmark and Italy. The new financing will be used to enhance opposite Europe, commencement with launches in Germany, Ireland, Portugal and a Netherlands this summer.

It’s also eyeing enlargement over Europe — so will be speccing out a broader roadmap for a future.

“The categorical concentration of this spin is to spin a series one actor in Europe. But also to try opportunities outward Europe as well,” says CEO and co-founder Sami Marttinen. “That’s something we will be looking into yet no petrify skeleton to announce during this point.

“There are still opportunities for a business indication everywhere in a world. So it’s a matter of usually building a roadmap — where to go next.”

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

Swappie touts flourishing consumer direct in a segment to buy refurbished phones, observant that from 2018 to 2019 revenues grew 4x, attack $35M+ in net income in 2019. It’s also saying direct stability to grow this year — recording a 5x boost in net income expansion in Apr and May 2020 vs a same duration final year, notwithstanding a ongoing COVID-19 pandemic. Indeed, a trend of consumers changeable to offered some-more online looks to be a assistance for a online marketplace.

Commenting on Swappie’s Series B in a statement, Tony Nysten, Investment Manager during TESI, said: “We trust there is a outrageous expansion event for Swappie. The smartphone marketplace in Europe is value over €100BN yet used or refurbished phones now make adult usually over 10% of that and usually one in 4 pre-owned phones are now re-sold. Through a fast expansion to date, Swappie has proven a ability to not usually grow marketplace share within a refurbished market, yet to enhance a distance of a difficulty overall. The business has huge potential.”

Swappie’s early choice of marketplace concentration enclosed not usually informed territory in a Nordics — yet Italy, in Southern Europe. The latter was selected deliberately on comment of it being a tough marketplace for ecommerce, per Marttinen.

“In a unequivocally early days a reason since we went to Italy was since it was one of a toughest ecommerce markets in Europe — they have a unequivocally low ecommerce majority index. It’s unequivocally opposite in terms of offered behavior. You need to build another spin of trust in that market. There are lots of singular traits like money on delivery, things like that. So we knew that in sequence to unequivocally conquer a marketplace globally — and to be means to broach on a tellurian ambitions we would need to enter as formidable markets as early in a tour as possible.

“These days we have a many some-more modernized playbook and marketplace studies opposite Europe.”

Swappie describes itself as a ‘scale-up’ tech business on comment of addressing a whole value chain, per Marttinen.

“We’ve finished a lot there on a hardware side — when it comes to indeed refurbishing a inclination we can make them even stronger afterwards a strange inclination in many cases. So that means we can go as low as onto a motherboard spin in a repairs. Then on a program side, of course, we’re creation offered and placement and all else scalable. Making certain that a checking processes and all a processes in a bureau are according to a latest standards,” he says.

“Because of being so focused in also building a processes and focusing on a peculiarity so much, so indeed we have been means to truly change a approach people devour electronics,” he adds. “If we consider about it from a internal actor viewpoint they are typically mostly competing for a people who are already offered used inclination — since we are means to broach on this marketplace by carrying full control of a whole value chain, from offered to refurbishing, to offered a phones to consumers.

“Most of a business are offered used or refurbished inclination for a initial time — so indeed a biggest competitors are new smartphone retailers.”

The many renouned iPhone indication sole on Swappie’s marketplace final year was a iPhone 8, per Marttinen.

He won’t disclosed a accurate series of iPhones Swappie has refurbished and sole during this indicate yet he says it’s a six-figure series — aka ‘hundreds of thousands’. 

The group chose to concentration on iPhones to safeguard they can broach a top peculiarity device refurbishment, he says, while also benefiting from a comparatively aloft cost of Apple’s smartphone hardware vs Android devices. Though he doesn’t order out expanding to offer another form of refurbished smartphone in future.  

“The business is now flourishing unequivocally fast yet what we beheld in a early days is that a new device prices had started to arise before we started this business so we have been unequivocally propitious with a timing,” he tells TechCrunch, observant that Swappie also benefitted from a plateauing into advancements between handset models in new years, as a record matured.

“If we can build trust into this business, and make certain that a phones duty as good as new inclination — and that you’re indeed creation a offered routine as good as protected as offered a new phone — that approach we can indeed accelerate a expansion of a market. So that’s what we have been unequivocally successful in. It’s kind of a pivotal to being means to grow so quickly.”

“One categorical indicate there has been that since we remodel each device ourselves in a possess bureau in Finland we can broach to business a top peculiarity inclination underneath guaranty for many reduction than a cost of a new phone and also be some-more environmentally friendly,” he adds.

While, in years past, there have been instances of iPhone users’ inclination bricked after a correct by an unapproved correct emporium Marttinen says Swappie is regulating usually strange iPhone tools so has avoided such problems.

He also points to new European Commission proposals for a pan-EU ‘right to repair’ for wiring that suggests device makers offered in a segment will be compulsory to honour repairability, rather than regulating program updates as a approach to reprove consumers who find to extend a lifespan of their stream device.

Photo credit: Swappie

Swappie’s business also slots into a wider Commission goal to transition a EU to a round economy, as partial of a immature understanding announced by stream president, Ursula von der Leyen — so it’s skating to where a puck is headed, if we like.

“It’s unequivocally good for a sourroundings that a right to correct legislation has come brazen in a past few years. That’s one unequivocally critical indicate for us as good that was one of a reasons since we wanted to built microscope spin repairs in a factories — so we wouldn’t have to throw as many phones as we routinely would,” Marttinen adds.

What can’t it repair? The suit of iPhones that spin out to be truly unsalvageable around a processes is “extremely small“, he says. “We can indeed do any repairs that are probable to do a phones so, basically, H2O shop-worn phones that have been during a bottom of a sea — those are of march unrepairable. Or if a phone is focussed too many or if a motherboard is totally ruined. But fundamentally all a other faults we can repair.”

On a opposition front, he says Swappie’s categorical opposition are retailers offered new iPhones — given it’s perplexing to woo iOS users divided from offered a code new iPhone. On a secondhand marketplace front Marttinen mentions reBuy as one of a categorical opposition players in refurbishing and reselling electronics, yet it does not concentration on iPhones — charity a full operation of devices, from wearables to smartphones and tablets, laptops, consoles and cameras.

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