Tag Archive for: Absolvo

Avokado – the online shopping service – raises a seed round

Hungarian start-up „Avokado”, what is the concept behind it?

Our days revolutionizing the FMCG e-commerce sector is not easy. The ones taking this challenge in Hungary are part of a start-up named „Avokado”. The goal is to bring a smooth and unique shopping experience to users who are enabled to shop from multiple stores while getting all delivered at once to their doorstep. On the other hand, the goal of the retailers is to enable expansion to the digital world while widening their customer base.

Avokado’s current investment

Current seed funding gave proof of Avokado’s business concept & and business model. The investor is ED Group (investment holding of Balázs Várkonyi and Gyula Kelemen). Várkonyi and Kelemen are very well-known successful entrepreneurs in the field of e-commerce which is bringing waste experience and „smart money” to the Avokado team.

Excellent founding team

Some of Avokado’s team members are Tibor Székács, Erik Barcsay and Szabina Matócza each individual with decades of experience in e-commerce. Tibor is the CEO of Avokado, coming with experience in execution & and leading the whole process of launching „Aldi” in Hungary, after which was the Group Managing Director of Hofer, responsible for more than 800 stores. Erik founded BIG FISH, an e-commerce-focused software company, that offers its services tailored to market leader players’. Kristóf is coming with the background of introducing and leading Tesco Online in Hungary. Szabina built Háda’s Webshop (Hungary’s largest second-hand fashion online store) handling 40 000 products monthly and overseeing expansion to 6 countries, other than that at Cherrisk.com she managed the international rollout, and as VP of e-commerce for 4 years overseeing the rollout to 3 countries and building the team from 6 to 70 people.

Partnering with ED Group is bringing an additional layer of expertise. Várkonyi back in 2001 year founded with his partner Extreme Digital web shop, which expanded to 9 countries. In 2019 it merged with eMAG, another regional e-commerce giant and Várkonyi became its CEO with more than 800 employees. In 2023 from eMAG group separated Vatera.hu (online auction portal) and Ingatlan.com (Hungarian local major real estate website) and Balázs announced that Vatera and Jófogas (classifieds website) would merge and become the biggest domestic used goods market. During more than 2 decades of his e-commerce industry-specific experience, he gained numerous awards and recognitions.

Steady growth in online grocery

Some of the pain points in the online shopping current market are sometimes 10-25% higher prices than in stores, logistic struggles of bigger chains that can’t cope with short delivery times, missing best-seller products online, and no same-day delivery. Current retail market trends no doubt are moving the tendencies to the growing market of online shopping experience where Avokado sees an existing gap and market niche still to fulfill.
Proof of concept is also an example of Instacart in the USA that Avokado sees as a familiar idea that they would like to tailor to the domestic market needs, said Szabina Matócza, Avokado’s Managing Director.

Our role in securing Avokado’s seed investment

Absolvo is convinced that this team can build the next possible unicorn, and that’s why we joined them on this journey. Starting now with the first step (a seed round) and accompanying them for future A/B series rounds in the not-too-distant future. Our team proudly supported them in rethinking the growth strategy, positioning the story, financial planning and then establishing talks with local and international investors, negotiating the terms, and assisting in deal signing. More and other levels of achievements are yet to come!

 

Unveiling the hidden dangers of questionable market reports: a must-read for business owners and investors

‘Hello Sir, are you interested in the global time travel machine market and how it’s poised to be booming in the coming years? If so, it’s your lucky day, because I’m presenting you with a once-in-a-lifetime offer – a market report available to you for an unbelievably discounted price of only 3300 dollars.’

Global time travel machine forecast for sale

The anecdote above serves as an extreme example of a shady market research company. However, they are more concerning than amusing, as they can easily mislead anyone regarding the trends and expectations in any market segment.

In this post, we’ll guide you through the challenging landscape of questionable market reports. By the time you finish reading, you’ll be equipped with the tools to identify doubtful data and safeguard your decisions and investments.

Our experience in this field

At Absolvo Consulting, daily comprehensive market analysis is an integral part of our work. With a primary focus on the technology sector, we thoroughly examine market size and trend progression within a wide array of studies sourced from multiple channels. Our method involves delving beneath the surface to critically evaluate the underlying data. This rigorous analytical approach equips us to accurately assess demand for a company, its promising opportunities, predict potential deals, investor appetite or pinpoint regions with the most promising activity. Our standard procedure includes checking multiple market studies concurrently for each project. Consequently, we’ve identified anomalies in various market reports, shedding light on significant disparities in expectations and projections.

The case study revealing essential insights

During one of our projects, we conducted an examination of a niche market in the IT industry. The results of this analysis serve to vividly highlight the stark contrast between trustworthy and dubious market reports. We compared the forecasts provided by a single reputable research company (in green) with those offered by eight less reliable research firms (in red), and the findings are quite enlightening. In each row, the first value signifies the current estimated market size, while the second value denotes the projected market size.

Case study: market estimate discrepancies

In this specific niche market, the estimated market size was roughly four times greater when considering the average questionable research company in comparison to the evaluation of the industry expert. However, instances of extreme ‘over-estimations’ were also observed, with projections reaching levels 30 to 40 times higher than the actual market size. These exaggerated base market size estimates significantly influenced the forecasts. Consequently, even though the Compound Annual Growth Rate (CAGR) is the highest in the case of the trustworthy firm, its projections remain the most conservative, resulting in the smallest anticipated market size.

Background checks are necessary

While in some cases, the forecast numbers themselves may raise a few eyebrows, most of the time, they aren’t that unusual. This is especially true when your rational sense is somewhat clouded by the hope of your niche segment being the one with the most significant growth potential. If you’re not relying on data from a renowned industry authority, it becomes crucial to conduct a background check on the source.

In our experience, well-founded research takes substantial staff and resources to produce, as extensive data acquisition and primary research is required for meaningful insights. Respectively, several renowned research companies are specialists in their selected fields, with a relatively narrow focus of industries.

This raises doubts about the credibility of relatively unknown companies that claim to offer an extensive collection of reports or claim to cover a wide range of industries. It’s also worth noting that dubious market research companies often target niche segments where reliable data is scarce or entirely unavailable.

Another key characteristic we’ve observed is that questionable market research firms tend to maintain a front-end presence in the EU or US, with their backend operations often situated in other geographic locations (e.g. several back-end operations of questionable research entities may be found in India, however, it’s important to emphasize that not every Indian market research firm provides dubious data). What’s particularly noticeable, though, is the consistent presence of market reports of dubious companies on the first pages of Google search results. This observation implies that they invest significantly in SEO services, ensuring their high visibility in search listings.

Negative consequences

Frequently, we come across mentions of dubious market reports within companies’ materials, such as pitch decks. This situation can be detrimental for both startups seeking investment and companies aiming to attract potential buyers. Inaccurate data has the potential to impact a company’s valuation and the expectations of its stakeholders, sometimes even leading to a deal falling through. Moreover, it can erode a company’s credibility in the eyes of investors who are aware of those market segments (with several active investments) or have conducted thorough research and identified exaggerated or inaccurate figures. Such discrepancies can somewhat tarnish a company’s professional image.

Conversely, investors can likewise experience adverse consequences resulting from an inaccurate approach. This could lead to overpaying for a company or having unrealistic expectations based on improper market projections provided by the seller. In light of these scenarios, it’s evident that using accurate, reliable data in company materials is mutually beneficial for both parties involved in a deal.

The vital takeaways

  1. Don’t put all your faith in the first Google search results.
  2. Always use multiple sources.
  3. Don’t immediately swallow the sugar-coated figures; seek data from credible experts.
  4. Always check the research company’s fields of expertise and background.
  5. Trust accurate forecasts for your industry as a whole rather than relying on questionable specific niche data.
  6. Only invest in reports when you’re absolutely certain of their authenticity.

Continest successfully raised EUR 6.5M VC funding round

Our Client Continest Technologies, developing and manufacturing innovative, foldable modular containers has received a total of HUF 2.4 billion (~ 6.5M EUR) in a syndicated investment round with the participation of DBH, Focus Ventures and Hiventures to support its growth ambitions.

The current investment round is aimed to further boost Continest’s international business development and expansion, as well as to support the establishment of a new manufacturing unit to increase production capabilities.

Continest debuted on the internationally recognized Sziget Festival in Budapest, Hungary in 2017 with their mobile infrastructure solutions and 2 years later, in 2019, the entire service facility of ski world championship in Sweden was built by their containers. Beyond the purpose of office and event utilization, they are also developing tailor-made solutions for defence and medical industries (mobile COVID-test laboratories). Due to its foldable nature, the sustainable Continest innovation makes the process of logistics 80% more cost-efficient.

To accelerate industry-specific product developments, enter new European markets and support growth ambitions, Continest successfully raised 4M EUR venture capital in 2019 from DBH. Continest Technologies, founded in 2019, achieved a turnover of more than HUF 820M already in 2020, which dynamically increased to HUF 1.6 bln in 2021. 

The global market developments of recent years and the increasing demand for sustainable development have led to global demand for temporary infrastructure solutions. That is why we see the next few years as being the decisive years for foldable modular container technology. Together with our new and existing capital investors, we have the opportunity to scale up and enter new markets with a very stable financing base, further contributing to domestic exports. The construction of our number two plant, which will be inaugurated in September this year, will open up the opportunity to produce in even larger volumes and to further develop our manufacturing technology said Dániel Tegzes, strategic director of Continest Technologies.

In 2021, the company inaugurated its first container factory in Székesfehérvár, Hungary, which is currently capable of producing 1,000 foldable containers per year and provides jobs for 53 employees. In the future, the Continest factory will use Industry 4.0 solutions, and the company’s state-of-the-art sheet metal plant and welding hall will be supported by robot technology for efficient production. The company is also planning a significant expansion of its workforce, with nearly 50 new jobs to be created by 2022. The second plant will also offer the possibility of in-house surface treatment of containers, and the annual production of containers will reach 3,000 units.

The company is currently working on developments such as the fully equipped kitchen container, cargo containers, which are also suitable for freight transport. Another ongoing project is the vertical farm container, which is being developed in partnership with Green Drops Farm and Baptist Relief Services to create a hydroponics-based crop production system without the need for topsoil.

In addition, Continest is continuously developing its containers for medical and defence use. In May 2022, the Hungarian Defence Export Agency signed the first cooperation agreement with the company, under which the military technology agency will assist Continest in international marketing and distribution.

“It was a long journey with full of challenges, but there was no doubt about the success with such a great team!”said the transaction advisory team leader of Continest’s, Lénárd Horgos, partner of Absolvo. “By nature, venture capital is not primarily focused on investing into hardware and manufacturing companies, but Continest is a particularly good case study on how to grow a manufacturing company with rock-solid commitment to a 1+ bn business in a few years’ time and make it an attractive target for venture capital to invest. The Continest success story reflects the exceptional combination of manifested, intensively growing global market potential, a truly innovative and well-customizable technology and a committed, ambitious and visionary management team which is already proven to move its company forward. It was a great honour for us that – after the first successful investment round in 2019 – our team was trusted again to support Continest in preparing, negotiating and closing its current investment round. We are delighted to take part in achieving the current milestone but Continest’s growth journey is not yet over; moreover, I feel confident that a new Hungarian success story is just being born!” – added Lénárd Horgos.

 

Source: official press release

Innonic’s Shoprenter successfully sold its majority stake to the Polish e-commerce giant IAI

Our Client Shoprenter, a member of the Innonic Group, a major SaaS-based e-commerce platform provider in Hungary agreed to sell majority stake to an international strategic investor to further exploit its growth potential in the CEE region and Europe.

In July 2021, Shoprenter closed a successful M&A transaction with the market leader Polish e-commerce SaaS provider company IAI (IdoSell), which acquired a majority stake (51%) in the Hungarian company.

IAI – backed by the leading digital PE fund in Poland and Central Europe MCI Capital – reported GMV (gross merchandise value) of EUR 2.6bn EUR in the fiscal year ending April 2021, and it provides e-commerce systems for 6000+ online stores and 1500+ online accommodation booking facilities.

The acquisition of its peer Shoprenter is one of the very first important milestones in IAI’s European and international expansion and becoming a global player.

Shoprenter was advised by Absolvo Consulting in the transaction process with IAI.

Conversific successfully closed EUR 2M late seed VC funding round

Our Client, Conversific, a Hungarian ecommerce analytics tool developer, has just closed a late seed round of EUR 2M with Hungarian financial investors, Bonitas and Hiventures, after a successful seed funding round of EUR 0.5M in 2018 from Hiventures and the founder group Innonic. In the last transaction Conversific was advised by Absolvo Consulting.

The company offers ecommerce reports and benchmarks, data insights, as well as product and consumer analysis. It has 20k users from 180 countries, more than 90% of the sales is generated internationally, out of which 60% in the US, UK, Canada and Australia.

The recently raised capital will be used for an international market research, subsequent innovation and further product development as well as sales & marketing investments to support international expansion, the co-founder and CEO Norbert Bodog explained.

The management is regularly approached by investors with buy-out intentions; however, the owners would only consider a full exit once the company becomes more sizeable, Bodog pointed out.

Conversific has been generating revenues since its first year of operation, and the annual turnover has increased tenfold since the seed funding. According to their financial plan, Conversific will reach the EUR 3M ARR (annual recurring revenue) point by end 2023, he added.

Conversific ranks first among the analytics tool on Shopify, which position the company aims to protect with its variety of features, as well as its freemium and monthly subscription-based SaaS pricing model.

Conversific’s main target group are micro and small sized companies, with up to 10-50 employees or around EUR 1M to 10M annual turnover, Bodog said.

The COVID-19 pandemics has not affected the company in a negative way, as operations easily moved to a remote working environment, he said, adding that on the other hand, global ecommerce growth has accelerated due to the lockdowns, that has a significantly positive impact on Conversific too. 

Congratulations to the Conversific team, thank you for the effective co-operation and we are happy and proud of being part of your success story! We wish all the best and good luck in achieving your ambitious goals!

A new investment brings Prefixbox’s e-commerce search to Poland

Our Client Prefixbox, an AI powered e-commerce search provider, gets a seed investment from Euroventures to bring their e-commerce search to Poland, too.

Prefixbox has just received 500k EUR investment from Euroventures, a notable CEE investment firm, as the first part of a larger capital raising project. The investment will be used for deep product development along with supporting the international expansion of the Hungarian startup throughout the CEE region, with Poland as the first stop.

This investment gives a lot of confidence to the company to further improve their product search for webshops. Their solutions can increase the revenue generated by search users with as much as 47% for webstores, as well as provide a better-quality customer experience. Product search plays a more and more important role for e-commerce managers, along with the rapid growth of the industry and Poland is not an exception to that.

This investment is a huge milestone in Prefixbox’s history. It gives us a boost to help us accelerate our growth, developing the team, and international expansion starting from Poland. We’ve had great traction with our existing Polish customers and are excited to open a new office to better support them and the market. Through developing our product and taking it to the world, we are striving to become the world’s best e-commerce search provider.”- said Istvan Simon, the founder and CEO of Prefixbox.

With this investment Prefixbox is planning to open a new office in the heart of Warsaw and build up a local sales and customer success team to be able to serve Polish customers’ needs and provide them with the best e-commerce search engines possible.

With existing customers from over 9 countries, Prefixbox’s clients in Hungary include – among others – Extreme Digital (edigital.hu), Rossmann (shop.rossmann.hu) and Praktiker (praktiker.hu), in Poland webstores such as Tania Ksiazka.pl, Militaria.pl or Cyfrowe.pl.

The startup was also recognized by Gartner in the 2019 “Market Guide for Digital Commerce Search”.

Prefixbox has been advised by the growth financing team of Absolvo in the transaction process.

Source: Prefixbox’s official press release