Swappie raises USD40m in Series B funding round
Swappie, an end-to-end online marketplace for buying and selling refurbished smartphones, has raised a USD40.6 million (EUR35.8 million) Series B funding round.
Participants in the round included TESI, alongside existing investors Lifeline Ventures, Reaktor Ventures, and Inventure - all of which participated in Swappie’s Series A in 2019 - bringing the total amount raised by Swappie to USD48 million (EUR42.5 million). The funding will be used to accelerate Swappie’s international expansion and to support the company’s rapid growth.
Swappie was co-founded in 2016 by Sami Marttinen (CEO) and Jiri Heinonen (CMO) with the simple mission of providing customers with a way to upgrade their phones that is high quality, more affordable and environmentally friendly.
The smartphone industry has a significant impact on the environment, with the majority of carbon emissions coming during the manufacturing process. On average, 85-90 per cent of a smartphone’s environmental impact comes during the manufacturing process and, according to Apple’s own data, more than 56kg of CO2 is emitted in the creation of a single iPhone 11. With more phones than people in the world today, empowering individuals to make sustainable choices when buying a smartphone is more important than ever. Unfortunately, reliable and responsible players who securely offer this option are currently few and far between and research shows that less than 1 per cent of smartphones are recycled properly.
By refurbishing iPhones to the highest standards using the latest technology, Swappie is reducing environmental waste and offering consumers a safe and secure way to get connected for less. Headquartered in Helsinki, Swappie operates its own refurbishment factory in the Nordics and sells directly to consumers via its online store. All Swappie devices are fully inspected by Swappie’s professional technicians and every phone sold comes with a 12-month Swappie Warranty.
Swappie has seen incredible demand from consumers to date, putting it at the forefront of a new wave of European purpose-driven tech scale-ups. From 2018 to 2019, Swappie saw its revenues quadruple to over USD35 million in net revenue in 2019. The company’s growth has continued to accelerate during the ongoing Covid-19 pandemic as consumers have shifted to buying more online: Swappie recorded a fivefold increase in net revenue growth in April and May 2020 compared to the same period last year. Currently operating in Finland, Sweden, Denmark and Italy, Swappie plans to use its Series B funding to drive rapid expansion across Europe, starting with launches in Germany, Ireland, Portugal and the Netherlands this summer.
Swappie also plans to use the funding to accelerate the growth of its team. From a team of two in 2017, Swappie has grown to a diverse team of over 260 from 31 nationalities and plans to hire another 400 people across Europe in the next 12 months.
Sami Marttinen, CEO and co-founder of Swappie, says: “As consumers become more aware of the environmental impact that their purchasing decisions have, we expect to see far greater demand for high quality refurbished smartphones. Because we refurbish every device ourselves, in our own factory, we control the whole value chain. This means we can deliver the highest quality devices, under warranty, for much less than the cost of a new phone. We’ve already seen fantastic demand for Swappie and we are thrilled to be announcing today’s investment, which will allow us to accelerate our international expansion and make the circular smartphone economy truly mainstream across Europe.”
Tony Nysten, Investment Manager at TESI, adds: “We believe there is a huge growth opportunity for Swappie. The smartphone market in Europe is worth over EUR100 billion, but used or refurbished phones currently make up just over 10 per cent of that and only one in four pre-owned phones are currently re-sold. Through its rapid growth to date, Swappie has proven its ability to not just grow market share within the refurbished market, but to expand the size of the category overall. The business has enormous potential and we are delighted to be participating in this funding round to support Sami, Jiri and the rest of the team as they enter the next phase of Swappie’s sustainable growth.”
Arma Partners acted as exclusive financial adviser to Swappie throughout the round.