Evoco increases stake in ReBuy

The deal was announced at the end of December 2020. It sees Evoco and its investors increase their stake in ReBuy to more than 50%. The deal is a share purchase with a total value of €14m.

The company's shareholder base now includes Evoco, its investment partners and German state-owned development bank KfW.

Asked about the timing of the investment, Michel Galeazzi, partner and co-founder at Evoco, told Unquote: "We completed a capital increase in 2018 and now this deal is about consolidating the capital table. We had the opportunity to buy out some other shareholders who wanted to consolidate their own.

"We also massively believe in the circular economy and e-commerce. We had responsibility as lead shareholder before, but this is a clear sign that we are ready to support the business further."

Galeazzi also said the company's governance is key to Evoco's decision to increase its stake. "ReBuy was previously financed by VCs, with smaller stakes, but we wanted to take responsibility for the governance when we invested in 2018, creating the right room to make decisions and bringing in the right people. The management team and board can really bring in their views, with a diverse set of people, and this is more value-generating. We strongly believe in good governance – that is the number one tool to generate value."

Galeazzi also noted that ESG is a key consideration for the GP in continuing to invest in ReBuy. "Demand for truly sustainable businesses like ReBuy is definitely increasing at the moment, so we are seeing quite a bit of inbound interest for the business – in particular, sustainability-linked funds and investors would like to be involved."

During Evoco's investment period, the GP has assisted the company with the further development of its pricing algorithm and the establishment of its brand. "We have helped to shape ReBuy's business model to be very data-driven: the pricing algorithm is a key part of the business," said Galeazzi. "ReBuy buys from consumers and sells to consumers, and has all the data in between, which feeds into this algorithm. ReBuy refurbishes in-house with its own staff, so we have internal quality control, which is part of how it has become a well-known and trusted brand."

Although the e-commerce sector is often seen as a fragmented market, the GP does not currently plan to seek add-ons for ReBuy, Galeazzi told Unquote. "We're focused on organic growth – we would not say no to an acquisition if it makes sense, but as the market leader, the business will grow organically. ReBuy is already active in five European countries and we would expect growth in international markets to accelerate."

The coronavirus pandemic has presented challenges and opportunities for consumer-focused businesses. Asked whether the pandemic has affected ReBuy, Galeazzi told Unquote: "There has been more activity, in that general e-commerce businesses have seen a lot of interest, but consumer behaviour has not changed, which shows that the business is fundamentally healthy, not just riding on a wave.

"Sustainability is important to consumers who buy from ReBuy, irrespective of coronavirus. The crisis has provided for a little bit of a tailwind, but this is largely because the management team has done a great job in driving the business and implementing operational improvement projects."

Evoco is currently on the road for Evoco TSE III, which held a first close in June 2020 on €93m against a target of €150m. The fund will deploy equity tickets of €30-60m, investing in lower-mid-market businesses with a turnover of €30-250m. The fund plans to acquire four to five portfolios of three to four businesses, comprising around 20 companies in total.

Previous funding
DuMont Venture acquired a 16% stake in ReBuy in April 2008; Hasso Plattner Ventures and KfW also took part in the round.

Hasso Plattner provided additional equity for ReBuy in November 2011, as well as a €10m debt facility.

Iris Capital led a €5m funding round for ReBuy in March 2013, investing alongside Hasso Plattner and Jadeberg.

German Startups Group acquired a stake in ReBuy in December 2013 and increased its shareholding in March 2016.

Evoco acquired DuMont's stake in a direct secondary transaction in May 2017.

In 2018, Evoco led a €21m funding round for ReBuy, backing the company alongside its investment partners Headway Capital Partners and Keyhaven Capital Partners. At the time of this funding round, the company employed 450 people and had reported revenues of €100m in 2017, according to Unquote Data.

Company
Founded in 2004, Berlin-headquartered ReBuy sells refurbished electronics such as mobile phones and laptops, as well as media including books and music. The company refurbishes electronic equipment in-house using original hardware as replacement parts. ReBuy operates in Germany and the UK.

The company is expected to report revenues of more than €150m in 2020 – this figure has almost doubled during Evoco's investment period, while employee headcount has risen by 20%, according to Galeazzi. The company now has 550 employees, according to its website.

People
Evoco – Michel Galeazzi (co-founder, partner).
ReBuy – Philipp Gattner (CEO).

Correction (09/03/2021): this article was amended to correct the name of ReBuy's CEO.

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