For the second time in a short period, Fortino Capital, an investment vehicle of wealthy Belgian business families, has made a second investment worth millions in the Dutch tech sector.
After having acquired a stake in online flower retailer Bloomon earlier this month, the Belgians have now shifted their focus onto BuyBay, a young IT service provider in the retail sector.
With BuyBay it again concerns an investment in the millions, the involved parties confirmed on Monday, but they did not divulge the exact amount. Thijs Bosgoed, founder and co-shareholder of the IT company, did say that Fortino will receive a small minority interest in exchange for the injection of capital.
Handling return shipments
BuyBay’s business is to handle return shipments from web shops and other retailers that sell online products. The company, which was founded in 2014, has developed special software for this purpose and searches for new buyers of returned products. ‘These products used to go to buyers who negotiated the lowest possible price. We offer a higher yield by approaching consumers directly again,’ says 33-year-old Bosgoed, who was previously involved in introducing the discount coupon site Groupon into Europe.
Representative of the new
Fortino views Buy Bay as the representative of a new sector that will develop off the back of classic retail business. ‘It’s a fast-growing activity. Retail businesses are aware that they can get more out of return shipments,’ days Duco Sickinghe, the Dutch managing partner of Fortino and well-known as chairman of KPN’s supervisory board.
According to Bosgoed from BuyBay, the market for returned products in the Benelux is now worth between €2 and €3 billion a year. And it has not peaked yet. Bosgoed estimates the figure for collecting and reselling return shipments throughout Europe to be in the region of €200 billion.
Waste no time internationalising
As a result of this massive potential, BuyBay wants to waste no time internationalising, which will require new investments from an external financial backer. The capital from Fortino is needed to set up depots and increase manpower. Soon the company will be opening a branch in Nijmegen, from where it will enter the German market.
Almost three years after its foundation, BuyBay has fifty employees and an annual turnover of between €10 million and €15 million. ‘Its financial profile compares favourably with other start-ups. The company isn’t spending a fortune. That distinguishes it from many other young companies that suffer losses as long as critical mass hasn’t been achieved,’ says Sickinghe.
Nor is he particularly worried about the competition BuyBay could face from traditional logistical service providers. ‘There are few players in this market that also recycle return products to the consumer market.’
Fortino also has a stake in Bloomon
In early February, Fortino Capital also took a stake in online flower retailer Bloomon, situated near Alsmeer. The financial backer is the ‘lead investor’ in that venture, and its co-investors are the Dutch company Inkef Capital and the French company Partech Ventures. Together they’re investing $23 million in the flower delivery service which, like BuyBay, wants to expand in Europe.
The Belgian venture capitalist started operating in October 2013 with capital of €78 million, a large portion of which has now been invested in internet companies, technology suppliers and companies making the digital switchover. Fortino is only reluctant about investing in telephony. ‘We aren’t planning to invest in the Dutch telecom sector in the Netherlands,’ Sickinghe says, referring to his supervisory role at KPN. ‘I want to do everything in my power to avoid a conflict of interest.’ Fortino does have a minor stake in the mobile telephony sector in Portugal and on Malta.
Sickinghe, whose father was CEO of what used to be called VMF Stork, is himself the former CEO of Telenet, which he left four years ago when this Belgian telecom and cable company was acquired by the American company Liberty Global.
With the Fortino venture capital fund, Sickinghe is aiming for a long-term return of 15% to 20% a year.
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