Eight Roads leads $10m series-A for Universal Avenue

The company is the first Nordic investment for Eight Roads since it rebranded from Fidelity Growth Partners Europe in 2015, and brings the total raised by Universal Avenue to $17m.

Johan Lilja, co-founder and CEO of the business, told unquote" he and co-founder Petter Hederstedt would remain majority owners following the round, but would not disclose the cap table or valuation of Universal Avenue.

Lilja stated his company had been approached by Eight Roads and that there were multiple investors who had presented term sheets to lead Universal Avenue's series-A. The company's existing backers – UK-based VC Moor Capital and Nordic VC Northzone – also participated in the funding round alongside Eight Roads.

Lilja said the series-A had been raised sooner than expected, as the company had planned to seek funding in late summer, but saw multiple approaches and completed the fundraising process quickly. He said Eight Roads was chosen because of its global reach, connection to Fidelity and experience with comparable startups in its portfolio.

Fidelity has garnered a lot of publicity in the startup community in recent months, over the month-to-month publication of valuations of its US VC portfolio. The investment firm slashed its valuation of several high-profile portfolio companies to substantially below their valuations when Fidelity had first backed them. Lilja declined to comment, but it is understood that the valuations debacle had not figured in the talks with Eight Roads.

With the fresh capital in hand, Universal Avenue will seek to expand its presence in the UK and US during the second half of 2016 and recruit heavily, according to Lilja.

Universal Avenue has seen average revenue growth of 50% month-on-month over the past half year, according to Lilja, and is headed towards profitability in some of its markets, though overall profitability projections are dependent on how quickly it is scaling in multiple markets simultaneously.

He said the UK's decision to leave the EU may be a positive boon for the business, as companies looking to market their products could look for services such as those offered by Universal Avenue, instead of hiring a full-scale in-house sales force.

The company currently employs seven people in its London office and Lilja admits it may be more difficult to move good talent to the UK office if the Brexit situation changes free movement for EU citizens. However, he also believes it could prove an opportunity, depending on the outcome of post-Brexit negotiations.

In the short term, he predicts Brexit will have no major effects on Universal Avenue's London operations and the company's approach is to await and adapt.

Universal Avenue plans to retain its headquarters in Stockholm for the foreseeable future, despite the prospects of the Swedish capital's continuous success as a startup hub recently being called into question by Spotify founder Daniel Ek, who criticised the government's efforts to improve conditions for entrepreneurs.

Lilja said that while he agrees with some of the points raised by Ek in his open letter, Stockholm will remain the base for Universal Avenue as it provides several advantages, such as access to developers and user experience designers, as well as being in a good location for global expansion.

Previous funding
Universal Avenue first raised institutional funding in April 2015, when Moor Capital invested $2m of seed capital.

In September of the same year, Nordic VC Northzone joined as investor, leading a $5m round alongside Moor and Salesforce Ventures.

Company
Based in Stockholm, Universal Avenue is a salesforce outsourcing company, providing brand ambassador and customer acquisition services, so-called "sales-as-a-service".

The company hires and trains candidates to become brand ambassadors for businesses, and gives customers access to a global salesforce network without having to hire in-house teams.

Founded in 2014, Universal Avenue employs a staff of 44 across four countries.

People
Universal Avenue – Johan Lilja (co-founder, CEO).
Northzone – Tim He (principal).

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• Topics
• Expansion
• Nordics
• Support services
• Venture
• Fidelity Growth Partners Europe (FGPE)
• Northzone
• Sweden