The online trading company eMag grants an investment of 1.5 million euros to a Romanian online platform through which used phones are sold, which was founded by three young entrepreneurs.
Startup-ul Flip.ro receives the investment from eMAG Ventures, the venture capital fund of the e-commerce giant, which thus becomes a shareholder of the SH smartphone trading platform.
As part of this investment, eMAG Ventures bought the 42.26% stake held by Flip.ro’s minority shareholders and is investing 1.5 million euros in accelerating the business, announced, in turn, GapMinder Venture Partners, one of the shareholders startup.
The value of the eMAG Ventures – GapMinder transaction is confidential. GapMinder had invested 150,000 euros in Flip.ro in two rounds of financing.
Thus, Flip.ro reaches the third round of investments, the other two being in 2019 and 2020 and having a total value of 370,000 euros.
Flip.ro was founded, in November 2019, by George Moroianu (24 years old), Alin Luca (27 years old) and Alex Burghelia (23 years old), who keep 57.74% of the company’s shares. Flip is a marketplace of resold products, which buys, checks and sells refurbished phones and offers a 14-day return and a 12-month warranty.
Following this investment, the startup says it will “grow rapidly in the next period”, aiming for “the leading position in Central and Eastern Europe on the reconditioned products market”.
The startup has evolved rapidly so far, reaching 50,000 customers in less than two years. It sold its first smartphone in December 2019 and reached a turnover of 2.5 million euros at the end of 2020. During this time, the team has grown to 50 employees at the moment.
The three founders estimate a turnover of 14 million euros in 2021, an increase in the team to over 100 employees, by mid-2022.
“With the initial investments, we managed to grow faster than we had proposed at the local level, and in order to be able to scale and lead the business internationally, we need increased technology and operational know-how. We have a quality product, the necessary resources, a talented team, eMAG support and a common vision that give us confidence that we will succeed in becoming the main marketplace for refurbished products in the region. The attracted investment will go in three directions: team development, product development and Flip internationalization ”- it is shown in a joint statement sent by the founders of the startup.
“We discovered three energetic and highly motivated young people to take Flip to the next level, who demonstrated that entrepreneurship in the digital economy has very good prospects, regardless of the age of entrepreneurs. Also, the specific benefits of the circular economy, through which customers can save money and contribute to environmental protection, will quickly change the way millions of people will buy and use products, not only in the smartphone segment. I think that each of us has products in drawers that he no longer uses, and through Flip they can be easily and quickly turned into money. Flip is in a position to become the market leader in reconditioned products in the EEC in the next three to five years, ”said Bogdan Axinia, Managing Director of eMAG Ventures.
Flip says it solves the safety and warranty issue faced by both sellers and buyers of used products marketed through ad sites. Due to the verification and refurbishment process, the sellers receive their money guaranteed, and the buyers receive a phone almost like new, with a guarantee and the right of return, all safely and without hassle.
In the last 10 years, the sale of used and refurbished electronics, especially telephones, has become a very strong trend. Western countries, such as the United States, France, Germany, are among the first to embrace the concept of circular economy and its benefits. The refurbishment processes have become extremely advanced with the help of technology, and the customer receives a perfectly functional phone that looks like new, with a 12-month warranty and a 14-day return right at a great price.
In Romania, another online commerce startup with SH phones, Fenix.eco, which was opened in April 2020, at the beginning of the COVID-19 pandemic, was sold to the French company Recommerce Group, in June 2021.
eMAG has been supporting the circular economy for over 10 years through the resealed products program and it is no coincidence that eMAG Ventures’ first investment is directed to a marketplace in this area. In addition to funding, Flip will benefit from eMAG’s expertise in accelerating business through technology, operational know-how and rapid scaling of business internationally.
eMAG Ventures is an investment program for technology companies that bring innovations in products and services addressed directly or indirectly to end customers. Beyond funding, eMAG will provide selected companies with the know-how gained over 20 years of experience in the most dynamic tech sector of the moment, stimulating the digital economy. Thus, the selected businesses will benefit from the expertise of business acceleration and international expansion, acquired following the development of major projects, such as eMAG Marketplace, and companies that have grown rapidly in recent years such as Sameday, Fashion Days, tazz or Zitec.
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