In 2009, Fredrik Norberg purchased some Vietnamese bamboo vases in hopes of re-selling it on his interior design webshop. As it turns out, no one was interested in buying these vases, despite discounts and attempts to sell them on other channels. During this time, it dawned on the Swedish serial entrepreneur that it was very difficult for online stores to get rid of overstock and, so, the idea for Fyndiq, an online bargain marketplace, was born.
Since then, the Stockholm-based startup has raised a total of $25 million in funding and garnered more than 900,000 unique customers on its Swedish site. Considering Sweden’s population is around 9.5 million people, Fyndiq’s customer base is pretty decent.
The company – which was founded by Norberg, Dinesh Nayar, Micael Widell, David Brudö and Dan Nilsson – also claims to have outgrown eBay in its home country.
With its recent launch in Germany, we chatted with Fyndiq co-founder and CMO Norberg about how it’s different from established online marketplaces, and what’s next for the Swedish startup.
Lasering in on bargains
With established online marketplaces like Amazon and eBay already on the scene, what makes Fyndiq’s offering stand out, other than its focus on bargains?
“One big difference is that we’re trying to be much more simple and user friendly. And we want to be able to use the fact that we’re an underdog – so much more fast-moving – at least compared to the bigger actors like Amazon, eBay and Alibaba and so on,” responded Norberg (below), who previously built up five companies in the realm of e-commerce before starting Fyndiq.
Ultimately, the aim is to become a big bargain superstore where customers can find everything from spare parts for cars to fashion to cell phone cases, he said.
Fyndiq’s B2B2C business model is also a point of differentiation when compared to online discounters, such as Germany’s Lesara, which also aims to create a simpler digital experience for bargain-hunters but stocks its own items.
“We don’t have any inventory ourselves, we will never have that,” explained Norberg. “We have two customer groups: one is the merchants, who are providing the supply-side of the marketplace, the other is the consumers, who are bargain hunters coming to the marketplace to buy the bargains, representing the demand-side.”
As for monetisation, on one hand, Fyndiq takes a 5 per cent fee from merchants when a product is sold and, on the other hand, it collects a €5 shipping fee from consumers shopping through the platform, regardless of how much they spend. In 2014, the company reported a turnover of €21 million.
Germany as global proof-of-concept
Interestingly, unlike companies like Spotify that had aggressive international expansion plans, Norberg said that Fyndiq is taking a slower approach to growth, which seems a bit contradictory to its self-proclaimed 'fast-moving' mentality.
More specifically, the company, which raised $20 million in Series A funding from notable Nordic VC Northzone and others in 2014, will focus on Sweden and Germany in “coming years” before entering new markets.
“Sweden was our technical proof-of-concept to show that our flows are working and we have a business model that’s interesting to both the consumer group and merchant groups,” he said, “But getting a piece of the pie of the market in Germany will be the proof-of-concept on the global level. After that, we will be able to scale into new markets.”
We'll be following Fyndiq to see whether they can make strides in Germany.