Verdane invests in AsGoodAsNew

The deal will not see AsGoodAsNew's existing venture capital investors exit the business, although a number of early-stage individual investors will sell their stakes as part of the round.

Verdane intends to support Asgoodasnew's business development and international expansion.

"The deal came about through a dialogue about a portfolio secondary that started last year and evolved into this larger primary transaction," Maroje Guertl, principal at Verdane, told Unquote. "We find that conversations about portfolios can often give access to additional dealflow such as in this case and hence give us a further sourcing angle."

The investment in AsGoodAsNew capitalises on Verdane's expertise and investment thesis, Guertl said. "AsGoodAsNew's business model fundamentally appealed to us because it's supported by two structural growth trends we believe in: sustainable society and the digital consumer. This is also the investment thesis that underwrote Momox. The offline to online shift is something we have underwritten for years and was very much accelerated with Covid-19."

Verdane has made 30 previous investments in the e-commerce sector, the GP said in a statement. Verdane invested in Germany-based secondhand sales platform Momox in September 2018, increasing its share in the business in April 2019 and June 2020. The GP now owns an 85% stake in the company.

"We did not consider AsGoodAsNew as an add-on for Momox," said Guertl. "Despite the apparent similarity in both businesses buying and selling goods to and from customers, there are important value chain differences regarding supply and demand dynamics."

Guertl also highlighted that sustainability is a key element of the investment, since AsGoodAsNew sells secondhand refurbished goods. "If you take the average product sold on AsGoodAsNew – say a new phone – it saves 50kg of CO2 compared with buying a corresponding new product. 50kg of CO2 is roughly comparable to taking a flight between Berlin and Frankfurt. That becomes meaningful given that the company has had one million customers."

Buy-and-build is not a set part of AsGoodAsNew's growth plans, Guertl said, although he noted that the market does present opportunities. "That said, there are definite opportunities to consolidate today, and even more so over the coming years," he said. "There have been a lot of entrants in the market and this continue to be the case. There will probably come a point where there might be consolidation plans, but it is not part of our core value creation thesis."

Guertl did not cite any specific exit route that the GP is considering for the company, but said Verdane expects AsGoodAsNew and the secondhand goods sector to continue to show strong growth. "The tailwinds supporting the industry at present, including the upcoming EU taxonomy and further regulation, as well as shifting consumer demands, mean it is quite early to discuss an exit. We invested as we see strong structural growth, and the company is performing extremely well. We are more focused on expanding the business for now to bring out the potential we see."

The GP is deploying equity via Verdane X, which held a final close in January 2019 on SEK 6bn. The fund makes direct investments, as well as secondary portfolio acquisitions. AsGoodAsNew will be the fund's 10th platform investment, according to Unquote Data. Momox is also part of the fund's portfolio.

Asked about Verdane's current deal pipeline, Guertl said: "We are seeing an active market in consumer and direct-to-consumer businesses – a lot of founder-led companies have come to a growth stage where they want to make the next step, and we are working on a few deals related to that. On the software side, we are also seeing interesting dealflow."

Previous funding
AsGoodAsNew operates two internet portals and brands: AsGoodAsNew and Wirkaufens. Point Nine Capital invested in Wirkaufens in December 2010, alongside a group of business angels.

In July 2011, Ventech and Point Nine Capital backed a €4m round for the company.

BC Brandenburg Capital (via BFB Wachstumsfonds Brandenburg), PDV Inter-Media Venture and Ventech took part in a growth capital round for Wirkaufens in November 2012.

In February 2014, Seven Ventures led a further funding round for the company.

In January 2015, Munich Venture Partners and MCI Management joined the company's investor base, leading a €11m round. Existing investors Ventech, PDV Inter-Media Venture, Brandenburg Kapital of the Investitionsbank des Landes Brandenburg (ILB) and Seven Ventures also participated.

Company
Established in 2008 and headquartered in Frankfurt (Oder), AsGoodAsNew is an e-commerce website that allows users to buy and sell electronic items such as tablets, phones, cameras and watches. The company has offered a 30-month warranty on its products since 2014.

AsGoodAsNew operates profitably and reported revenues of €52m in 2018. The company's revenues have grown by more than 150% in the past five years, according to a statement. It employs 110 staff, and operates in Germany, Austria, France, Spain, Italy and Poland.

People
AsGoodAsNew – Daniel Boldin (CEO).
Verdane – Maroje Guertl (principal).

Advisers
Equity – Lupp + Partner (legal); DueDive (commercial due diligence); Deloitte (financial due diligence).

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