eEquity is one of the Nordics’ most active e-commerce investors. We sat down with partner Aida Jammal to discuss what it really takes to build a strong consumer brand in today’s market. We cover customer obsession, competing with low-price Chinese players, the financial metrics investors look for, common mistakes, how to think about discounting, and more.
3 takeaways from the conversation with Aida Jammal
1. Profitability has replaced “growth at all costs”
The days when a fast-growing consumer brand could raise capital without solid unit economics are long gone. Aida was clear that investors now expect a realistic path to profitability, and in many cases, profitability from the very first customer in the home market. She described a “dream P&L” that includes strong margins at every level, disciplined marketing spend, and an EBITDA profile that shows the business can scale without burning cash.
The message was simple: most companies don’t fail because of lack of demand. They fail because their economics don’t hold up. Marketing inefficiency and inflated fixed costs are the most common culprits. Brands that want to raise capital in this market need to demonstrate financial discipline, not just top-line ambition.
2. Customer obsession is the only real competitive advantage
With rising acquisition costs and an increasingly saturated landscape, Aida stressed that customer obsession has become the strongest predictor of long-term success. This goes far beyond having a good product or strong visuals. It means understanding who your customers are, why they buy, how they behave in different markets, and what makes them come back.
She described customer obsession as a “360-degree mindset” that has to live across the entire organization: product, marketing, sales, wholesale, and operations. The best brands adapt their messaging and offering market by market, build true loyalty, and continually expand relevance through product innovation. In a world where anyone can copy your ads or your creative, the depth of your customer understanding becomes the closest thing to a moat.
3. The landscape is getting tougher
One of the most striking parts of the conversation was Aida’s assessment of the impact Temu, Shein, and other ultra-low-cost players are having on the Nordic market. These companies entered at exactly the right moment, when inflation, weakened purchasing power, and a hunt for bargains made consumers unusually price sensitive. As a result, they have taken meaningful market share in record time.
For brands, this means quality, product features, and differentiation matter more than ever. Discounting needs to be strategic, not a habit. Relying solely on DTC is increasingly risky, and the strongest companies are the ones that meet customers wherever they shop, whether that’s wholesale, marketplaces, or physical retail. Competing with low-price players on price is a losing game. Winning requires competing on trust, brand, relevance, and community.
Watch the episode:
Transcript
Josua: [00:00:00] Yep. That should be, should be good to go. So Ida, thank you for, uh, coming on the show and welcome.
Aida: Thank you so much. Thank you for having me.
Josua: Absolutely. So, so let’s start with if you could [00:00:15] give a brief introduction, you know, your background and the work that you and the, the team at e Equity, what you guys are up to.
Aida: Yes. So E Equity, we are a growth equity fund based in Sweden. We’ve been around since 2010, [00:00:30] and our strategy is to invest in digital companies direct to consumer B2B, uh, software companies. Um, we’re a team of about 10, 13 people here in Sweden. And, um, when we started off investing, [00:00:45] we had this vision that internet was going to become big, e-commerce was going to become big.
Aida: So, um, we were one of the first actually investors in e-commerce. Um, and back in 2010, the majority of those kind of companies were resellers. So, you know, there were [00:01:00] marketplaces selling other brands, whether it’s shoes or um, those kind of mostly apparel actually. So in our first fund, we did a lot of those kind of investments, um, and multi-brand resellers.
Aida: And then in 2014 15, [00:01:15] when, um, Instagram became big, we saw a lot of, you know, direct to consumer businesses popping up. Um, obviously those were super interesting companies because they were able to cut, a lot of men sell directly to consumers. The profit margins were amazing. [00:01:30] Um, so we started doing a lot of these kind of investments.
Aida: Um, for example, you know, Shimi eyewear, John Henrik Twist Shake, amen. Um, and later on, you know, in 2000 and. 19 onwards. We started seeing a lot of very [00:01:45] interesting B2B, um, you know, enablers for e-commerce, whether it’s payment solutions, logistics, uh, CRM, those kind of, um, business models. So we started doing a lot of those kind of investments as well.
Aida: So e equity, we are a digital investor. We love tech, [00:02:00] we love retail. We’ve been doing it for many years. We’ve done about 40 investments since we started, and we have about 22 active portfolio companies today.
Josua: And that’s, I think the reason why I’m so excited to talk to you today is because you have both this like long perspective on how the [00:02:15] market has evolved and also a very broad perspective because you’ve invested in all these different companies and sectors and you probably all big or major fast growing retail, um, or consumer, consumer, uh, digital e-commerce brands in Sweden especially [00:02:30] are on your radar or you’re actively talking to.
Josua: So I, I fair to say you have a fairly broad and deep perspective on, on the market and what investors want to see.
Aida: We do, we have a, a very strong network here. I think if you are an e-commerce brand or a consumer company [00:02:45] with 8 million Euros plus in revenue, you would have heard of us or would know us personally.
Aida: Um, we have, you know, we look at all the brands, uh, and companies that, you know, fit our criteria. I would say we probably know all of the [00:03:00] companies that we should know at this point, and we built a, a pretty strong reputation. And that’s thanks to our sector focus. I think as an investor, the more focused you are, the easier it is to, um, find the kind of companies that fits your profile.
Josua: Totally. So [00:03:15] we have a lot of topics that we want to cover. Uh, let’s start with kind of a state of the market. What’s, what’s, uh, kind of happening right now? What are investors looking for? What should companies be prioritizing as they’re seeking to, to raise, uh, money? [00:03:30]
Aida: So going back to what’s happened, you know, a lot has happened in the last couple of years.
Aida: You know, being an investor in this market, um, for the last, you know, five plus years has been really interesting. You know, I started in, in, at a equity in [00:03:45] 2019 and, and at that time I would say consumer was, you know, there was, there was a healthy appetite for consumer, but it really skyrocketed in 2020 thanks to the pandemic.
Aida: Uh, and who would’ve thought that the accelerator for e-commerce would be a [00:04:00] pandemic? But, but apparently it was. Um, so, you know, e-commerce in Sweden, it, it has always had a stable, consistent 15% growth every year, you know, between 2006 and 2019. And then we saw 40% growth rate in, in [00:04:15] 2020 and 20% in 2021. Um, you know, money was cheap back then.
Aida: Uh, it was all about growth, you know, growing at all costs. Um, valuations were super high. There was an investor fomo, obviously. [00:04:30] Um, and you know, post COVID what you saw was a lot of overstock in those companies. There were a lot of, you know, promises that were never kept. Um, and that’s really because, uh, of the, you know, macroeconomic factors with interest rates, increased [00:04:45] inflation wars, um, that obviously had a, a big impact on discretionary spending.
Aida: Um, and also supply chain and just. Cost and raw materials increasing and also a weaker currency. Um, so it’s been very volatile and I think a lot of investors feel [00:05:00] burnt out and, and the appetite for a consumer has definitely decreased. You see a lot of investors not investing in consumer whatsoever, obviously for, for a, you know, somewhat consumer investor ourself.
Aida: We, we continue to look at consumer. We’ve seen, you know, the [00:05:15] market shift also positive for us. It’s, you know, it’s allowed us to enter certain companies and sectors at pretty, you know, attractive valuations. But yeah, the appetite for consumer has not been the best I would say. Now in 2025, we are definitely seeing improvements.
Aida: The [00:05:30] first half of 2025, there was still negative, uh, growth rates for e-commerce, at least in Sweden. But, um, we’ve had what, eight consecutive interest rate decreases in the last year. Um, discretionary spending is improving, the consumer [00:05:45] appetite is improving and, and, and e-commerce actually is up 13% and in Q3 versus minus 3% in the first half year.
Aida: So it’s, it’s definitely getting better. Um, and I think, you know, as investors, we have waited for, you know, for a [00:06:00] time like this because just like many other investors, we need to exit certain, um, certain companies that we have in our portfolio that we’ve had for a long time. So we are really waiting for, um, you know, um, the appetites, um, to improve amongst [00:06:15] investors.
Aida: And that’s, you know, that comes after really consumers, um, you know, buying more online and purchasing more. Um, so it’s getting better, but it’s been very volatile. I think that’s the way to put it.
Josua: So are, do [00:06:30] you think that we could be maybe going back to a phase where growth is being prioritized or is, you know, the, the excess that happened during COVID, is that kind of like a one-off?
Josua: It’s not gonna happen again. You need to focus on building profitable companies from now on.
Aida: I think never say [00:06:45] never, but I think as investors we’ve, we’ve learned a lot, um, during COVID, um, it was a time where I think a lot of us felt that we invested at very high valuations. Um, even when, even though the companies are growing.
Aida: You [00:07:00] still need almost a more than normalized market to make a good return on, on those investments. Um, but I think, you know, you never say never. Uh, I don’t, it’s hard for me to say that there’s gonna be another pandemic. Overall, I can say that the shift has been [00:07:15] positive. You know, 70% of of, you know, at least we, um, are, you know, shopping online.
Aida: So that has improved. Um, and, you know, e-commerce is always going to increase. The penetration rates are always going to increase. The majority of [00:07:30] commerce is happening physically. Um, but the transition to online is always improving. Um, but I think obviously the COVID was a large accelerator for that. I, I think we’re never gonna go back to doing the mistakes that we made before.
Aida: I think that’s part of human [00:07:45] nature. Um, I, I dunno if it’s mistakes, but I think we are a lot more controlled. I think we’re a lot more s. Disciplined both entrepreneurs and investors. I think growing a company, um, at all costs and not thinking unit economics, not thinking [00:08:00] l you know, longevity wise, thinking, um, about cash and doing things.
Aida: Um, I, I think we’ve all just become smarter and I don’t think, you know, money will be as cheap as, as it used to be back in the days as well. [00:08:15]
Josua: Yeah, that makes sense. So, so speaking of unit economics, do you, for instance, when you’re looking at e-commerce, uh, or, or do you see D two C brands and you value a, a them is kind of a, is first order profitability a must for you or are you [00:08:30] willing to accept, you know, certain loss provided that the LTV CAC ratio makes sense or how are you thinking about.
Josua: How about that?
Aida: That’s a good question. I think in your home market, you should be profitable on, on your first order. So we do look [00:08:45] at customer acquisition cost or CAC in relation to your average order value or cost of sale and relation in relation to your gross margin, two IE after cogs and after warehousing and freight costs.
Aida: Um, so that was the kind of metrics that we’ve always looked at. Um, [00:09:00] and they need to be, they need to look good. So it means that you need to be, uh, more profitable than you’re spending on every customer. Um, that shows scalability, um, in your, in your marketing spend. And it’s become more and more important, um, these days [00:09:15] because we don’t want to pay for growth, um, in the same way that we did before.
Aida: So, um, metrics like you’re mentioning, you know, retention rate is super important. Purchase frequency is super important. So I would say in your home market, we definitely need to see profitability on, you [00:09:30] know, on a very early stage. While we can be a little bit more forgiving if you are investing in a new market.
Josua: And have you seen that, I mean, in the companies that you’re evaluating and in, in your portfolio, have you seen companies really being able to take that kind of lesson to heart and be like, okay, [00:09:45] got it. We need to be, and demonstrating cutting cost or being more frugal or disciplined in their customer acquisition.
Josua: Have there been a shift, uh, in how companies build their, build their businesses?
Aida: Oh yeah, definitely. So if you, and I think it’s interesting also to tell the story of [00:10:00] what’s happened here. So obviously in, in, you know, 2019, um, a lot of companies were very influenced and marketing driven. It was all about discount cones.
Aida: It was all about focusing on your lower funnel, you know, the, the closest to the purchase. [00:10:15] Um, it was very, you know, companies were very short term minded back in the days. Um. It’s not like that anymore. It’s a lot more difficult to get conversion, and I think it’s because a combination of, you know, saturation and, and just [00:10:30] customer acquisition cost becoming more expensive.
Aida: Um, so I would say companies now these days are thinking a lot more broad funnel and, and actually having a full funnel marketing strategy, which we didn’t even think about as much before. You know, as investors we always have, [00:10:45] but even more so now. Um, so we’re thinking a lot more about how we allocate our marketing spend, not just.
Aida: Uh, in influencer marketing or, you know, lower funnel wise, but just thinking more upper funnel. How do we actually build a brand? How do we build a [00:11:00] story? Um, what is this story? Um, you know, how do we think about, uh, spending across different channels versus being too dependent on more cha one channel? How do we think about not paying for every customer that we get and, and, and doing a lot more CRM and retention work in, [00:11:15] you know, in-house.
Aida: Um, so there’s been a huge shift. I would say it’s, it’s a lot more difficult. To get success with your marketing spend today, um, because there’s just a high saturation and it’s difficult to find profitability in that. Um, and [00:11:30] that just means that we all have to be a lot more disciplined. Um, and we’ve done a lot of changes here when it comes to marketing efficiency.
Aida: Um, you know, everything from, you know, broadening, as I said, our, our, our strategy, but also, you know, being where the customer is, you know, where is [00:11:45] customer shopping? You know, TikTok wasn’t even around a couple of years ago. Um, and now that’s a very important channel for some of us, not always conversion wise.
Aida: You also have to be, you know, truthful to what channels are actually bringing most success. You know, Google, uh, sorry, meta is still one of our most [00:12:00] successful marketing channels, but, um, we’re not allocating, you know, 90%, uh, of our spend to it anymore. We’re, we’re allocating more to other kind of, um, channels.
Aida: So I think it’s important to be agile as a cus as a, as a brand, um, and not just, you know, not be narrow [00:12:15] minded and, and think about. How it can become more efficient. Um, also with our time and our spend and, and just be customer obsessed. And I think that the brands are more, you know, the more customer obsessed you are as a brand, the more successful you are.[00:12:30]
Aida: Um, if you’re not customer obsessed, you really will, will not survive because you’ll just be one of many. Um, so, and I’m happy to talk more about customer obsession and what that means. Um, but we, there’s been a lot of changes and influencer marketing, for example, which was super hot a couple of years ago, [00:12:45] we don’t spend as much money on that.
Aida: It’s more user generate content, which you could say is some sort of influencer marketing, but it’s a lot more about scale, um, you know, and reach, um, versus, you know, finding, uh, one influencer that’s gonna [00:13:00] bring a good return on investment. It’s, it’s not that kind of efficiency anymore.
Josua: Got it. And I definitely wanna get back to both the customer acquisition, kind of the product part and also the marketing, customer acquisition.
Josua: But, uh, if still on topic of kind of like the financials, because you mentioned e [00:13:15] equity, you’re very, you have a very specific sector focus. Yeah. Which I guess one of the benefits of that is that it allows you to get very specific on what you want to see in terms of financial performance for these companies.
Josua: So if we take a, a consumer, uh, a digital consumer brand, do you [00:13:30] have kind of a dream p and l or balance sheet? Like what are the things when a company comes to talk to you? I mean, obviously you’re looking at the team, you’re thinking about the market and the category, but you’re also looking deep at the company and you have probably some.
Josua: Hard rules [00:13:45] or, or rule of thumb that you want to see. So can you kind of walk through that, um, what that looks like?
Aida: Yeah, happy to. So you’re right, we do have some sort of dream p and l. Uh, so if we’re thinking a direct to consumer brand now, so mainly a brand that sells its own [00:14:00] products, directly consumers, so not a reseller, um, of other brands.
Aida: We really want to see, uh, a strong, uh, gross margin one. So that’s just after your cogs. We need to see 65% plus, you know, ideally over 70%. And of course, [00:14:15] um, that’s mostly if you are, uh, primarily focused on your on, you know, on selling on from your own e-commerce channel. If you have wholesale, then obviously that gross margin one will, will d uh, will uh, be lower.
Aida: But 65% plus is where really where we are at. [00:14:30] And then gross margin two. So that’s after your warehousing and your freight, you know, your, your outbound delivery cost. That has to be around, you know, 15% of sales. So that brings you to, you know, 50% plus in gross margin. Two, and of course that [00:14:45] is a little bit sector, um, dependent.
Aida: So if you are selling furniture, then obviously your outbound delivery cost will be higher than if you’re selling beauty. But, but somewhere around there is really what we need to see. So 50% after all your, you know, direct and indirect costs [00:15:00] for delivering the product to the customer. Now what you have left is marketing.
Aida: Um, so, so come to, come down to gross margin three. Um, we need to see gross margin three of about 30% plus, which means that maximum you can spend marketing as a percentage of sales [00:15:15] is 20%, ideally 15%, um, of net revenue. But, but 20% is typically what we say. Um, uh, um, is, is really the maximum that you need to spend on marketing.
Aida: And after that, what you have left is your fixed costs. So your [00:15:30] overhead, your personnel costs, your HQ costs that we typically say need to be max 15% of sales. And we need to see economies of scale here. Obviously, um, as you grow, your fixed cost base should not grow. Um, so, so there [00:15:45] should be that kind of correlation.
Aida: Um, and we can be a little bit more forgiving on your fixed cost base if it’s, it’s a little bit high when you’re still small. Um, but, but it cannot be, you know, 30% of sales. That’s, that’s quite a red flag for us. So after all of those margins, you [00:16:00] should have an EBITDA margin of, of about 15%. Um, plus, so as I said, gross margin one, ideally 65%, two, uh, 65% plus gross margin, two after freight warehousing, 50% plus.
Aida: And, uh, gross margin. Three after marketing. [00:16:15] 30% plus, um, and, and your EBITDA minimum 15% for us to be interested. Um, and there are obviously many different factors here. Um, of course, if you have, you know, uh, multiple, uh, income cha, you know, uh, channels like wholesale marketplace, that, [00:16:30] that could be different.
Aida: If you’re selling, um, you know, furniture, um, typically it’s difficult to get, um, those kind of margins, but, um, that, that’s kind of where we stand.
Josua: Super interesting. Where do you [00:16:45] see companies, if you think about all those metrics that you mentioned, where do you see companies most often not being able to meet those benchmarks that you have?
Josua: And in where our com where, where do you often find that there’s most opportunity for improvement? Is it in fixed cost? Is [00:17:00] it in the, you know, cogs or is it marketing spend or. Does it really vary from all? It’s all over the place.
Aida: Yeah. So let, so let me try rank them a little bit and, and start from gross margin one.
Aida: So, gross margin one is typically quite difficult to impact. Um, [00:17:15] uh, it’s not, uh, you know, of course you can negotiate with your suppliers, but, but it’s not always a quick fix. Gross margin. Two, um, there’s only so much you can do. You know, freight and warehousing is always going to be somewhere around 12 to 15% of your sales.
Aida: What you [00:17:30] can do to improve it is o obviously, um, um, negotiate with your warehouse, you know, or your three pl supplier or just become more efficient. We’ve seen, you know, some, uh, companies, um, invest in automation and, and, and these kind of things, so of course you can improve, um, [00:17:45] but it’s not as easy, uh, either.
Aida: And there’s always only, you know, only so much you can do. Um. Really the biggest impacts in the p and l, um, where we often see a lot of, you know, inefficiency is actually when it comes to marketing. Um, and I’ve seen a lot of brands that have, [00:18:00] you know, great growth. But if you’re spending 40% of your, uh, sales and marketing, um, to reach that growth, then that’s telling me, you know, that that’s not sustainable.
Aida: Um, so I would say number one is probably, um, how much you as a D two C brand, at least you, [00:18:15] you know, how much are you spending on marketing and what do does all those, you know, metrics look like within your marketing? ’cause I need to see scalability and I need to see, you know, healthy retention rates. Um, and then when it comes to a fixed cost base, I would say that’s probably the quickest fix for a p and l.
Aida: [00:18:30] Um, you could always move to a cheaper office. You can always, you know, um, unfortunately scale your, your organization or sorry, um, uh, lower your number of FTEs. Um. There’s a, a lot that you can do fixed cost-wise, but you still need some [00:18:45] sort of, you know, um, fixed cost base to cover, um, or to like sustain the future growth.
Aida: But there’s a lot that you can do fixed cost-wise. Um, so I would rank them as, as number one marketing and, and number two, fixed cost.
Josua: Got it. And [00:19:00] just, um, outta curiosity, what do you find is more often the case that companies are, maybe they’ve succeeded in the product, they’ve found a great product, they’re customer obsessed, like you said, but the financials don’t make sense.
Josua: They don’t have the discipline. Customer acquisition maybe doesn’t really, you know, doesn’t make [00:19:15] sense. Versus companies that really focus their, they’re great on the financials, but they’re struggling because they don’t, they haven’t figured out that product. Is it, you know, do you have, do you see those two type different types of cases or.
Aida: I mean, typically, um, [00:19:30] what you’re mentioning here is, you know, if, if you are not having healthy financials, but you are seeing, um, you know, customers are happy with your, their products, that shows a vulnerability and maybe that you’ve just spotted a trend and that you’re riding on [00:19:45] some sort of short term trend, for me at least.
Aida: Um, and that’s always a question that we ask when we meet a brand. You know, are you just riding on a trend right now or have you actually built a concept here, a, a real brand? Are you just transactional or do you for real have [00:20:00] a community, um, that, that is loyal to you? Um, so, so typically they should go hand in hand, you know, um, a, a company with healthy financials.
Aida: Typically have products that customers love, products that, that make customers come [00:20:15] back. They’re able to show, you know, a healthy product expansion strategy, IE if you’re selling, um, a certain product, but then you’re expanding to a different category, your customers trust you enough to, to buy that category.
Aida: For us, an investor, that’s a huge green flag because obviously [00:20:30] when you scale, you scale mostly to by doing two things, you know, you expand geographically or you, you expand, um, product wise. So those are the things that we need to see to make sure that this is not just a trend where you’re finding just a short term success, but this could, there could be some [00:20:45] longevity here.
Aida: And that’s actually one of the biggest challenges as well as, as investors, because you wanna obviously spot companies that are, uh, you know, growing, um, healthily, but it’s not just a short term growth and it’s, it’s, it’s a sustainable brand that will, um, [00:21:00] stay.
Josua: Well, speaking of growth, we didn’t mention that.
Josua: So you mentioned the, the financials you wanna see in terms of margins and profit. Um, what about growth rates? I’m guessing, you know, you don’t wanna see negative growth rates. 5% is probably not enough. No. So like, is there hard? Or [00:21:15] soft rule for that.
Aida: There is, and, and you know, we, we should always be careful about saying numbers here because, uh, you know, it’s very important for us.
Aida: We are obviously growth investors, so we have to see growth, you know, um, but, but we, we wanna grow in a controlled manner. And I think that’s where e [00:21:30] equity, um, are, are unique. Not unique, but we’re different from maybe venture capital funds where, you know, they’re just looking for a unicorn and a unicorn and they don’t maybe care as much about.
Aida: That all their 20 companies and their and their fund are doing well. We care about all our companies doing well on an [00:21:45] average. All of them should have a growth. Um, and they all should be, um, doing well on average. But I would say, um, a 30% growth year in year is, is, is pretty, um, is good enough. Uh, and I think you can, um, if you’re growing 30% every [00:22:00] year in a controlled matter, you know, your fixed cost base is not increasing with, with your growth.
Aida: That means that your profitability levels are, should, you know, getting better. Um, your marketing efficiency is getting better because as you grow and the longer you, you know, exist, your, you know, your customer [00:22:15] base and your tension rates should, um, help you with that growth. Um, so those are the, you know, that, that’s very important for us.
Aida: Um, so definitely growth. We are a growth investor. We, we love growth, but, um, not, not if it’s, um, impacting your [00:22:30] profitability negatively. And there’s so many companies and it’s interesting. We, we typically, you know, name a, a couple of them. But, um, it’s very obvious when you look at their p and l that for every growth they are just losing money.
Aida: And that’s not where we wanna be. No investor wanna [00:22:45] be there. And I think back in the days, couple of years ago, that was maybe more okay because you think, oh, we’re reaching scale. Um, but for us, that’s not, that’s not the way we think and the way we work as investors.
Josua: Got it. So, you know, I think great answers [00:23:00] on, on when it comes to the metrics.
Josua: Very clear. Obviously, you know, investing is more than metrics. So as you’re meeting these founders are pitching you, what else are you looking for? Are there, you know, green flag, red flags? What, what kind of. Yeah. What stands out to you as you’re, you’re thinking about [00:23:15] beyond the going, kind of beyond the metrics,
Aida: beyond the metrics.
Aida: I need to see that you have, um, satisfied customers. I think that’s really important. I think, you know, we need to see that you have, regardless of what kind of product it is, um, the, [00:23:30] your product, your customers need to be happy with what you’re making and what, and, you know, you need to have a reason to exist and you need to have a product market fit.
Aida: Um, and, and not, I’m trying not to mention too many metrics, but there are obviously a lot of data that you can sort of follow, um, to [00:23:45] see that, um, other, you know, other things we need to see that you’re able to grow beyond your home market, that you didn’t just get lucky in your home market. We need to see that there is scalability, especially as a Nordic investor.
Aida: You know, the Nordics population is only about 4% of Europe to [00:24:00] reach scale to, to, you know, to, to have a turnover of a hundred million euros. Plus, you know, most companies need to have, um, some sort of success story outside of their home market. Other green flags, you know, visionary, you know, entrepreneurs, entrepreneurs are [00:24:15] coachable.
Aida: Um, it’s very hard to work with defensible, you know, excuse me. But arrogant entrepreneurs, we need to see entrepreneurs that are, um, you know, easy to work with. They’re open-minded. That just makes the partnership with us a lot easier. [00:24:30] Um, and, you know, I love, there’s always a question that we ask in the first meeting when, when we meet entrepreneurs, I think is a huge green flag.
Aida: We typically ask them, you know, where do you see the company in five years? And depending on the answer, that really says a lot. You know, some cust, some entrepreneurs [00:24:45] are very transparent and they say, you know, I’d love to, um, live in Spain, uh, you know, work, you know, live there half of the year. And just kind of, you know, grow this company.
Aida: Um, but, but that doesn’t tell me that you, you know, it wouldn’t, if, if you get e equities as an investor, it’s gonna [00:25:00] be a lot of hard work in the next coming years. You know, we’re, we’re looking to, uh, you know, five to 10 times your company. Um, so we need to hear that you are looking to reach scale. Um, you wanna, if you are, you know, if you have a 10 million euro in revenue, we need to hear that you wanna reach a hundred, right?
Aida: So, [00:25:15] um, we, we, we need to see dreamers and I think, um, it needs, it still needs to be realistic. Um, but, um, you know, entrepreneurs that have high dreams that are very passionate about what they do, I think that’s huge green flags for me. [00:25:30]
Josua: That’s really good. I, I wanted to kind of ask that question as well, kind of from the, so entrepreneurs are aware of like, what are the expectations on an investor, like e equity as you come in, like in terms of growth and so on.
Josua: I think you made that very clear. H how, how do you think about, I mean, obviously [00:25:45] growth is one thing, but you’re looking to make an exit, so, um, there needs to be a future buyer of, of, of that company. Um. What typically, you know, as it comes to maybe the topic of exit readiness preparedness, like what are you, how are you helping [00:26:00] founders and teams think about the things that they need to do?
Josua: Is it kind of just doing more of the same, like you mentioned, you need to be able to show they’re expanding to more and more markets, more and more categories. You’re able to not be so reliant on just a few channels or just one channel. Is it kind of more of the [00:26:15] same, or do they need to do something very different in order to set themselves up for that kind of, uh, next, next level?
Aida: Uh, I love this question. Um, and, and there’s also been a lot of changes here, you know, because I think more and more [00:26:30] investors are thinking about the equity story for the next exit, you know, in five years or whatever, three to seven years typically, um, before even investing. So we’re putting together the equity story now before we’re even investing in this [00:26:45] round, and I think that’s becoming more and more important because exits have been really difficult.
Aida: You know, in Nordics right now, there are two and a half times more deals happening than exits. There’s, there it is, it’s been really lagging, um, in the, in the Nordics, especially for private equity capital. [00:27:00] So exit is really important and. There are many ways that we obviously prepare companies for exits, but I think if you are looking for the answer, oh, you need to do something very different from what you’re doing today, that’s not really what I’m gonna say.
Aida: Uh, you [00:27:15] know, I would say, you know, we typically find companies that are doing something really good and we just wanna reach scale. It sounds very basic, but if you’re doing that really well, um, then that’s what you should continue doing. And then there are a lot of other aspects of this, typically [00:27:30] entrepreneurs.
Aida: Um, are not necessarily the right person to lead, um, the company to the next stage. You know, even during the e equity holding period, the entrepreneurs are, and founders are typically the CEOs. They’re not necessarily the right [00:27:45] person as, as you know, in that CEO seat during our holding period. Um, you know, they’re, and, and I think, you know, we can talk a long time about this, but entrepreneurs are not necessarily the ones themselves that want to be the CEO of a big organization or, or a bigger [00:28:00] company.
Aida: Typically. They, they wanna focus on something else that they’re just really good at. And typically those things are sales or product development that they are actually really passionate about. They don’t wanna be responsible for, you know, um, a big organization. So some sort of succession plan I think is really important to discuss [00:28:15] either, um, before the large exit with e equity, because as I said, we’re growth investors.
Aida: We typically invest in the founders. We want the founder to stay. Um, we’re investing in a founder’s dream. Um. And, um, we [00:28:30] want the founders to obviously, um, continue being motivated, you know, throughout our, our journey. But that doesn’t necessarily mean that they are, they should stay a CEO. So some sort of succession plan.
Aida: Um, what else do you need to, to, you know. To, to [00:28:45] exit the company, you need to think about, you know, what the next upside is for the next investor. Um, so we love to talk about, oh, you know, we’ve seen traction in, in certain large markets, um, and, and they continue to be growth in those large markets. That’s, you know, obviously a huge green flag for [00:29:00] the next investor.
Aida: Um, but all, you know, don’t underestimate just infrastructure capital and human capital that is, is typically built. So when, when an investor like e equity comes in, because a lot of these companies, when we invest. You know, some of them are like family owned, you know, a couple that started it, or friends [00:29:15] from school or whatever that started the company and they found a great market product, market fit, but now we need to professionalize the business.
Aida: Um, so I would say there’s a lot of work that goes into just professionalizing the company and, and that that work starts already pre-investment in [00:29:30] terms of identifying what we need to do. And there are always two things that we do really, um, that we identify. The number one thing is organization. Um, we need to make sure that the, the companies actually have a CFO, that they have a functioning financing team in place, that they have, uh, you know, a professional product mon, you know, [00:29:45] development team.
Aida: Um, you know, or whether it’s a wholesale that we wanna do, that they actually have wholesale people. You know, we need to just professionalize the business in every department of it. Um, and, and the second thing that we always do is it, um, and I would say it actually, most companies now have pretty good IT [00:30:00] infrastructure, but when we started investing a couple of years ago.
Aida: You would see a lot of these self-developed different solutions within the IT infrastructure, that’s a huge no-go, uh, for us. So we need to make sure that the IT is, is scalable. Um, and that’s something that we do very early on. [00:30:15] And, and that those are just, you know, hygiene factors, um, for, for an exit. So infrastructure, capital, human capital, professionalizing the business during equities holding period.
Aida: Uh, uh, those are are great preparation for the, for the exit.
Josua: Got it. And I’m, I’m [00:30:30] guessing that, you know, this, we mentioned professionalizing, the, the kind of business, maturing the organization. It takes a long time even though it’s simple things. It takes a long time.
Aida: It takes a long time. But if you bring in the right people, and that’s also a mistake that I think a lot of [00:30:45] entrepreneurs do, and, and you know, it’s, it’s.
Aida: I understand why, but they typically, um, underestimate the importance of hiring senior competent people. A lot of, you know, cus a lot of companies tend to, uh, [00:31:00] tend to hire junior people in their organization. Um, and they just kind of. Teach them as they go along. But, um, it’s important for us to bring in, you know, the, the best kind of people for these kind of companies that we’re investing in.
Aida: Um, so we, we invest [00:31:15] a lot in, in human capital and making sure that these are the people that are going to execute the business plan that we typically put together. Um, ’cause it’s all about the people and it’s all about execution, um, at the end of the day. So making sure that we have the right people in place is, is really important.[00:31:30]
Aida: Um, and that’s really, it comes down to just, you know, recruiting in the right way. Um, but putting together a plan early on is, is really important, and that just makes it a lot easier during the holding period. Now, it never goes according to plan ever. [00:31:45] Um, or, you know, it’s, you know, who would’ve thought that a pandemic would happen or whatever, right?
Aida: The, you know, there’s a lot of economic, you know, macro economical, external factors that you don’t necessarily factor in when you’re modeling a five-year plan. Um, as, as, as you’re about to invest. But. [00:32:00] Um, I would say, uh, yeah, there, there, there’s a lot here that, that I can say about what, what typically goes right and what typically goes wrong, but yeah, of course it’s, it’s not easy.
Josua: Yeah. I definitely wanna get into that and kind of talk about the, from a founder’s [00:32:15] perspective of what it takes, what it looks like to build a company. Uh, just wanna go back to what you mentioned about the, did you say two and a half time more deals being done now than exits? Yes. Is that kind of the current?
Aida: That is the current.
Josua: So what do you think then the next couple years are gonna look like? Are we gonna have a bunch of, you [00:32:30] know, presumably we’d have to see a lot exits coming, um, down the pipe pretty soon, if that’s gonna be sustainable.
Aida: Right now, there are a lot of people on the, in my seat that are just waiting for a great exit market.
Aida: And if you’re looking at [00:32:45] the, you know, we, we are seeing clear evidence of improvements in the exit marketing. The IPO market is opening up, we’re seeing multiple companies, um, listing in the, in the Nordics in the last couple of months. So that’s, that’s a great, um, that’s, that’s a great evidence that the, [00:33:00] the exit marketing market is looking better.
Aida: Um, we’re seeing more transactions happening. We’re seeing the appetite for consumer improving. Now the criteria are different, but the app appetite is improving. So, yeah, I mean, definitely there’s, um, you know, LPs, the limited partners [00:33:15] that have invested in funds, they are desperate for distribution right now.
Aida: Um, so there hopefully, I think 2026 is going to be a year where you’ll see a lot more exits and, I don’t know, I don’t wanna say deals, but you will definitely see, well, as you exit, there’ll be deals. Obviously someone is [00:33:30] buying, but there will be a lot of private equity exits. I, I suspect in the next coming years.
Josua: That would be great to see. I think, I mean, because that creates, just, uh, creates both liquidity obviously, but also creates kind of momentum for people. Um, so let’s, let’s hope that you’re praying for exits. [00:33:45]
Aida: Praying for exits.
Josua: Okay. Let’s talk a little bit about kinda the building of the, the company. So one thing that it feels to me that, um, Swedes are generally very, very good at is knowing which things to outsource versus to keep in house.
Josua: So [00:34:00] let’s say in the context of someone who’s just starting scaling up their brand, you know, consumer, digital brand, call it, you know, less than 5 million euros in revenue, how should they be thinking about, you know, obviously you can’t have massive overhead, 15% gotta [00:34:15] gotta stay of below 15% the fixed cost.
Josua: Yeah. And, um, you only have so much time, so you need to be smart about how you use your time. So any general rules about insourcing versus, uh, outsourcing versus in-house?
Aida: I would say the two most [00:34:30] important things for a company to own. It’s two things. It’s products and it’s the customer journey. I think those two things you cannot outsource.
Aida: You need to have your product development in-house, and you need to have your touchpoints [00:34:45] with customers in-house, so you cannot outsource your whole marketing, um, team, for example, we, we also have portfolio companies that, that obviously use agents, agents for these things, but, um, we, we always encourage them to have most of it [00:35:00] in-house.
Aida: Um, and a lot of companies actually at yours, your size that you mentioned, they probably outsource most of it, but I think that makes them vulnerable because no one is ever gonna care about your company as much as yourself. So definitely do not outsource important. [00:35:15] Things like product and customer, that should be as in-house as possible.
Aida: Now, the other things that we think are a little bit more okay to outsource again at your size, that would be logistics. I would say. Um, it development, um, is okay to, to [00:35:30] outsource. Um, those are the only things I can think of. Uh, but, but the, the closest things to product and, and marketing and customers should ideally be in house.
Josua: Got it. I, [00:35:45] I used to, uh, I used to have my own own agency and worked quite a lot with e-commerce brands during the, the heyday. Mm-hmm. And I remember thinking in some cases, like some of our customers have not, not only are you ev extremely reliant on single channel, you’re also reliant [00:36:00] on us as a partner to be able to manage that channel.
Josua: Like you are respo, you are relying on us for the growth of your company. Like without us, you know, it, it, so it just, uh, it. If I was to have been in their shoes, it would’ve been a little bit, a little bit scary to have like this,
Aida: I [00:36:15] think the agency
Josua: be responsible for so much of our success.
Aida: I agree. And, and I wanna come back and just, um, clarify one thing.
Aida: I think outsourcing the machinery of the marketing to an agent is okay, but your content creation. [00:36:30] Always in-house. Um, so if you know, and, and you know, the machinery, you know, it’s, these days everything is based on an algorithm. Anyways, you know, I’m not underestimating the work that the agents do. Of course, there is some com, you know, important competency, uh, there, [00:36:45] that, that is not always in-house.
Aida: Um, but the content creation, the way that you talk about your brand, um, and even creating content for the different customer journeys and the different channels, you know, right now creating content that are channel relevant is [00:37:00] super important. You know, there are so many companies here that have gone wrong, that have done, you know, really cringey TikTok videos and these kind of things.
Aida: Um, and then the cus the companies that have really succeeded on new channels are the ones that are super agile and, and understand what kind of content they need to create [00:37:15] to different channels. Um, and that understanding, you can learn of course from an agent, they can advise you on it, but at the end of the day, it should be you who create it.
Josua: Ab. I, I totally agree. So what about when it comes to [00:37:30] the business model? Um, D two C obviously was very hyped, like you mentioned during a couple years ago was really sexy, big margins, uh, et cetera. You have complete control of the customer experience and and so on. But how are you thinking about that today is going pure D two [00:37:45] C?
Josua: Is that kind of a red flag for you? Do you wanna see multi-channel.
Aida: That’s a good question. And, and, and here also there’s been a certain shift, um, I would say a couple of years ago, selling directly come to consumer. You know, having [00:38:00] 98% of your revenue direct, you know, from your own e-commerce was, was really attractive.
Aida: I would say these days we are, uh, more happy than ever to see that there are multiple, um, channels. Um, and, and I [00:38:15] got, you know, I used to get this question, you know, what do you think about wholesale? Is it, you know, is it so bad for A DTC to sell through wholesale? I don’t think so, and I’ve, I’ve never really thought so.
Aida: I always think that you should be strategic. Though about, you know, um, where you sell your products, you know, don’t [00:38:30] just sell everywhere. You know, think about what kind of strategic wholesale partners that you should partner with. At the end of the day, it’s all about customer obsession, right? You wanna think about where your customers are, what, you know, what are they reading, what are they listening to, you know, um, where are they going?
Aida: Where are they [00:38:45] traveling? You know, what are they scrolling? What apps are they on? You wanna be where the customer is, and if that means that you need to, um, be physically in a certain store or department store, or you be, you need to be, uh, you know, you need to have a, a retail store, whatever you need to be on [00:39:00] a certain zalando or certain marketplaces, then be there.
Aida: Um, at the end of the day, you wanna be, you know, convenient for your customer. So I think it’s, it’s very positive that, you know, to have multiple income channels. To be honest, I think for some of our [00:39:15] companies even, I would go to say that that’s kind of been the reason why they’ve been able to perform so well.
Aida: Because the, for actually, you know, for the past couple of years, the online channel has been the most, um, the most difficult to find growth. [00:39:30] Um, while, um, companies have been, have still been able to have okay, you know, total growth rates because they’ve been able to rely on other channels. So I would say, you know, having a retail physical store, um, especially when you see a positive effect on your online spend.
Aida: So [00:39:45] for example, if we’re opening a store in stock com, we wanna see a halo effect with a marketing spend, which means we wanna see, you know, higher efficiency in our marketing spend, even just be, you know, um, even though we, we have just started a, a physical store, we wanna see that, um, more customers are seeing us and you know, in the store [00:40:00] physically, but they’re also shopping online or the first purchase in the store and they’re shopping online.
Aida: So we, we. We wanna see a spillover effect of everything we do, whether it’s, um, through wholesale or retail. And, and that is also exactly what we’re seeing. So, um, I would say it’s part, it’s, it’s great. It doesn’t make [00:40:15] you weak. Uh, it, it makes you thoughtful. Um, if, you know, for whatever reason you’re still able to grow a lot just through D two C, then that obviously shows a, a huge strength in your brand.
Aida: But don’t shy away, you know, don’t, [00:40:30] don’t think that you are not, you know, you are one of the unique ones that, that are just gonna be able to do it. So we’re increasingly more positive to wholesale. In fact, we’re seeing wholesale, as, you know, one of the more profitable channels in some of our companies, um, than the online channel.
Aida: The [00:40:45] online e-commerce channel. Yeah.
Josua: Right. So taking kind of a very pragmatic approach, which I guess is quite sensible.
Aida: I think so. Uh, and as I said, you know, I cannot emphasize this enough that in the last couple of years, a lot of the growth has come from these [00:41:00] diversifications mm-hmm. That we’ve done.
Aida: Mm-hmm.
Josua: You mentioned a bit earlier about discounts and, and promotions. How are you thinking about that? Is it something that companies should use tactically, like it’s a great way to drive growth, new customer acquisition, [00:41:15] or is it something that potentially becomes a very dangerous habit, very kind of an addiction, um, that erodes your margin in.
Josua: Hope the future, hope that yes customers are, are gonna come back and they’ll buy at full price and yeah, maybe they never [00:41:30] end up doing that. How do you think about discounting
Aida: again? Also here, I wanna go back because it’s happening, you know, this happened so much in, in the consumer space. Um, I would say post COVID.
Aida: We’ve never seen more discounting. And [00:41:45] obviously that was because a lot of companies had a lot of overstock. Whether it’s because they wanted to bring in the product as soon as possible because there was some, you know, supply chain issues, whether it’s because they believed us in a certain growth that never, um, materialized typically.
Aida: That’s [00:42:00] the reason. Um, but, um, there was a lot of overstock. So I would say two years ago, two, three years ago, everyone were discounting, you know, just to get out of stock, you know, just to clear out stock. The last couple of, you know, I would say 12 months or so, [00:42:15] we, we’ve really had a strict full price strategy in our companies.
Aida: And I wanna also say that we’ve never been the kind of investor that encouraged our companies to have a broad sale. You know, we’ve always had, you know, we’ve always encouraged our [00:42:30] companies to think very strategically about the way that they discount. You know, why would you have a discount your bestselling products?
Aida: Um, that’s a huge vulnerability you wanna discount. The overstock, you know, that’s what you wanna do. Um, so that’s really the [00:42:45] change that’s happened in the last couple of years. Um, there, you know, we’ve gone from a lot of discounting. Now we’ve cleaned out the overstock. We have a full price strategy. We actually track the discount rate every month very carefully, right?
Aida: [00:43:00] And the return rate, those are super important factors, obviously impacting your, your net sales. Um, but discount rates have been super important and that’s definitely gone down on average, I would say across our portfolio. You need to be tactical about your discount. You don’t wanna be a [00:43:15] brand that, um, only convert because of price.
Aida: We never invest in brands that only convert because of price. If we do, then I think that’s, um, that’s a mistake. We don’t, we also don’t wanna, like, we don’t [00:43:30] like price pressured sectors. Um, so we need to see that you’re able to launch a collection at full price and, and be able to sell that at full price strategy.
Aida: And if you, for whatever reason, and that happens a lot, had a little bit too much overstock [00:43:45] of that collection, then later on you think about how you have a, a discount strategy. So always, I mean, I’m for discount, but you need to be strategic and thought and thoughtful about it. You don’t wanna, you don’t wanna educate your customers to only buy your products at a discount.
Aida: I think [00:44:00] that’s, and unfortunately, so many companies are, are exactly there. Um, and that’s just, it’s very difficult to get out of it.
Josua: Yeah, totally. And I, and you, um, when you start doing the math, the amount of [00:44:15] new customers or whatever, like the, the compensation, the compensatory effect that you need to see from giving away your margin is pretty big.
Josua: Like, there’s a, you know, it’s a big ask like you’re. You’re, you’re setting yourself, you’re digging a deep hole that you have to dig, get, find yourself out of [00:44:30] eventually.
Aida: Exactly. It’s such a, you, you really erode your, your profit margins, um, heavily. And I just wanna say also, you know, um, when you, when you, the way that you think strategically about discounting, of course, one way is, you know, because you wanna clear out stock, but [00:44:45] it could also be to reward your existing customers.
Aida: You know, maybe you wanna give them a, a, a, a discount code because you wanna allow them to enter, you know, first when, when you have a new collection or whatever it may be. So, discounting as a reward, [00:45:00] I think is not wrong because as an existing customer, you wanna feel valued. Um, so driving that kind of, um, discount strategy, I don’t think that’s wrong.
Aida: Um, but discounting for every single new customer, you know, the probability of them waiting for the [00:45:15] next discount before they buy again is, is pretty high.
Josua: I wanna move on to kind of talking about the, the broader market, but I wanna go back to you mentioned customer obsession and just to make it very practical for people.
Josua: Like what does that look like in terms of metrics? Are you, should companies [00:45:30] be measuring their NPS or is there a certain customer retention or referral rate that you guys wanna see? Or how does that, what does that look like?
Aida: So, just to, when I say customer obsession, um, one thing that we’ve done in our company is when we say customer [00:45:45] obsession, we always have another word called 360.
Aida: And I’m gonna explain what that means. 360 means that when you’re customer obsessed, the every single department in your organization, um, is. Obsessed [00:46:00] as well, right? So you, you need to have a very, um, smooth communication between the product team, the sales team, the marketing team, the wholesale team.
Aida: Everyone needs to understand that’s the 360, who the customer is, what [00:46:15] the drivers are for the customers to convert, et cetera, et cetera. So customer obsession, you know, is across the whole organization, and that’s a shift in mindset that you, you know, the management team needs to really put in place. [00:46:30] So we have KPIs for every single department to measure, you know, customer obsession at the end of the day, right?
Aida: Um, and, and to give you some specific metrics you wanna see, obviously, um, you wanna see satisfied customers, you wanna see high retention rates, you [00:46:45] wanna see purchase frequency. Most importantly, you wanna see that you are relevant to the customer. That’s really what the customer obsession is, especially as saturation has, you know, there’s D two C is very saturated.
Aida: Um, right now. I think that’s also one of the main [00:47:00] reasons why customer acquisition is, is so expensive and gone, so expensive. Um, the way you stand out is by being relevant to the customer. And when I say relevant, you need to be really relevant. We’ve done a lot of work here, um, in understanding the [00:47:15] psychology and the drivers of our customers.
Aida: It comes down to it really. Um, and it’s so interesting, actually, we had, um. One company digging really into this, looking into the drivers, you know, some, and, and they, like, they categorize the [00:47:30] customers in different categories. It’s so interesting. You know, some customers are power seekers, some customers are all about enjoyment and so on, so on.
Aida: There’s so many ways that you can categorize your customers. You really need to understand who your customer is as a brand. That makes you a lot [00:47:45] stronger in every single aspect in the department. The way you communicate, the way you make content, the way you create products needs to be relevant to your customer.
Aida: And you need to start by understanding your customer. Um, so that’s, that’s something that we’ve done across, [00:48:00] you know, most of our portfolio companies that are, that are, um, DTC, um, understanding the customer and being relevant and cons and being relevant across markets. You know, just because something works in, in Sweden doesn’t mean that it’s gonna work in Norway, even though it’s so close.
Aida: And, and I have specific [00:48:15] examples of, you know, for example. Amen. Which is one of our, um, uh, portfolio companies, you know, super successful. Um, they, you know, they, the best sellers in Sweden are not the best sellers in Norway. So the way they communicate across different markets [00:48:30] has really been the driver for success.
Aida: Um, and I can say that about multiple other companies that we worked on. The way that you communicate needs to be so relevant to your customer because you understand them, and it’s across channel and it’s across geography. Those are really obviously the success [00:48:45] factors, uh, in the last couple of months and, and years.
Aida: Really.
Josua: I love that answer. Really, very, really comprehensive. So thank you for that. Okay. Let’s, let’s talk a little bit about market. Um, one trend that I’d love to get your thoughts on is kind of [00:49:00] influencer brand. So sometimes they succeed, sometimes they fail. What do you think are the reasons, because obviously it’s not enough to have a, a big name behind.
Josua: Behind the brand.
Aida: And I mean, I can mostly talk about the Swedish market and, and what I can say is we’ve [00:49:15] seen more failed influenza brands than successful ones. And I think, um, a lot of people underestimate the difficulty in, in making it as a DTC brand. It [00:49:30] goes beyond one, you know, influencer’s following and, and it really starts with product market fit.
Aida: If you just as an influencer launch a product because you wanna make sales. Without thinking about product market [00:49:45] fit, then that’s gonna make you very vulnerable and you’re not going to survive. So the, the influencer brands that have done really well are the ones that, just like any other company really, they launch a product that is, um, that has a, a, [00:50:00] a, you know, a product, a clear product, market fit.
Aida: I, it’s a product that customers want. It’s, it’s a cust, it’s a product that customers love, not just because of the influencer, but because it’s simply just a great product. And that goes with every other [00:50:15] company, right? So, um. I would say more as investors, we are not, um, you know, just because an influencer has started a brand, they’ve reached great scale quickly.
Aida: That’s more of a red flag than anything else because it’s, it, you know, [00:50:30] typically those brands are very dependent on that, on that influencer. So there’s, there are a lot of risks with influencers, um, and influencer brands. I think that it’s great to have zero marketing spend and, and still reach scale, but there is always a limit [00:50:45] to how much you can scale.
Aida: Um, so, so I’m not a pro influencer brand because I’ve just not seen enough successful brands. But that said, there are some, uh, te Tam I think, uh, which is owned by, um, Altor is a very successful brand [00:51:00] because they just make great product and, and you know, that brand is, has grown way beyond the influencer.
Aida: Um, so, so the less influencer dependent that brand is and it can stand on its own, then that’s a strong brand for us.
Josua: [00:51:15] Got it. What about in the case of, let’s say a portfolio company comes to you and says, Hey, you know, we found, you know, a portfolio company not started by an influencer. They’re doing well on all these metrics and so forth, and they come to you and say, Hey, we found this influencer.
Josua: He or she would be perfect as kind of a [00:51:30] spokesperson for our brand. We want to give them x percent equity in our company and have them.
Aida: I mean, we, uh, can’t mention a single time that we’ve, um, given an influencer equity just because they are an [00:51:45] influencer, you know? Um, actually we have one portfolio company, Shemi Eyewear, which does have a couple of celebrities and, and influencers in the cap table.
Aida: Um, but for us it’s, you know, we, we work with a lot of influencers. Uh, we pay them, we don’t give [00:52:00] them equity. There’s a huge difference here. Um, we also have portfolio companies, um, that do a lot of collaborations with influencers. I think Naked is a good example of that idea of Sweden back in the days. Um, and we’ve, you know, we’re always gonna do some sort of influencer marketing.
Aida: It’s [00:52:15] decreased a lot, uh, because the return on equity is not as strong as it used to be in, you know, 2019 to 2020 or 2021. Um, it’s more about user generate content. Of course that could lead influencers, but, um, we’re always gonna work with influencers. We don’t [00:52:30] necessarily give them equity in our companies.
Josua: Got it. Uh, let’s talk about, you know, big international competition. The United Amazon launched in Sweden a few years ago, I think.
Aida: Yeah.
Josua: And I haven’t been following it, so, but it seems like it fell a little bit flat, at least [00:52:45] the kind of threats that, that were perceived, uh, did not materialize. However, then we’ve had Temu and, uh, Shane and all these, uh, Chinese competition.
Josua: That to my understanding, have been huge. I mean, they’ve been hugely, hugely successful. And [00:53:00] personally, I I, I was not gonna buy it from Temu out of principle. I caved. I went up and ended up buying there, and I was like, as I was clicking through the website, I was like, dang, I understand why people shop here.
Josua: It’s like a wild, I mean, the selection, the price is free shipping. I was like, yes, I understand. So can [00:53:15] you, can you first of all maybe put some numbers to what we’re seeing here? Like, is this, is this a trend? Probably not, right? Is it something permanent? And how big is it? And how should brands, regardless of category, how should their think about their pricing, their [00:53:30] positioning?
Josua: In light of like these huge international companies that seem to have endless, endless amounts of money behind them.
Aida: I mean, I think it’s, you’re completely right to bring this topic up because low price Chinese [00:53:45] players have been stealing some serious market share in our, in our, in our market in Sweden.
Aida: You know, last year, 70% of the Swedish population, um, had made some sort of purchase, um, according to the sales candle, um, from a [00:54:00] low price, uh, Chinese, um, uh, seller.
Josua: 70%.
Aida: 70%, wow. In 2024 have made some sort of, um, purchase, um, on average 10% every month. Um, there is some sort of purchase from rural price Chinese players.
Aida: So, [00:54:15] so they are stealing some serious market share in, in, in Sweden. And I think it really comes down to timing. Um, I think. Low price or team machine, I, I’m just gonna call them low priced, um, Chinese players. They came [00:54:30] in in the Nordic at such a right time, right? Customer spending has gone down a lot.
Aida: Customers were hunting for bargains. Um, they were very price sensitive. Um, the only way, you know, [00:54:45] one of the, our most successful, um, campaigns really, or like marketing strategies was through discounting. Um, so that was, you know, the main way for us to convert back in the, you know, in a couple of years ago.
Aida: So I think timing is a big reason why they were able to [00:55:00] succeed so well in the Nordics, I think. Um, and also it just shows that customers are very price sensitive. Um, and I’m, I’m, I don’t know if I’m gonna say whether it’s a trend or if it’s permanent. I think there need to be some political. [00:55:15] Hindrance for them to sell as easily as they are doing now for it to, to really stop, you know, for it to really be limited a lot more.
Aida: Um, but yeah, they are stealing some serious market share. It’s, it’s down to, you know, launching at the right time [00:55:30] and, and obviously just because customers are just very price sensitive.
Josua: Okay. So, yeah, I, like I said, probably the politics would be the single biggest factor here. And it’s also like a huge question mark.
Josua: So, [00:55:45] wait, so then what do, what do brands, what do brands do should they, like you said you don’t want to, you, you typically, I mean, you’re not interested in going in price, uh, categories where there’s price pressure. Um, but how, how should brand owners, builders try to think about [00:56:00] pricing and positioning?
Aida: I think more than ever brands that, um, especially brands that wanna have a full price strategy, they should really focus on quality more than ever.
Aida: Um, I think that is [00:56:15] the, the best way to, um, win over their low price Chinese players. Um, so we are lifting, you know, product futures a lot more than we’ve ever done, um, to really talk about quality. Um, if you are a DTC, you know, you have [00:56:30] 70% typically as a, as a product margin. You need to always think about, why do I deserve, you know, this product margin from the customer, why should they pay a little bit more for me?
Aida: So if you have that in, in your, you know, in your mindset. Every, you know, in every [00:56:45] aspect that you, you know, run your company, then you’ll just lower your vulnerability. There are also other aspects that I, I think I need to mention, obviously, the, the ESG environmental impact. Um, you know, being able to show that you have, you know, great [00:57:00] conditions for your workers, um, you know, good, um, quality, um, for your products that you’re doing things in a, in a healthy way.
Aida: Also, just building community, I think is really important, um, to lower, you know, your [00:57:15] vulnerability against these, you know, super cheap, uh, typically Chinese players. Um, so building a community and a, and, and a customer base and, and loyalty is super important because it means that, you know, you’ve, you’ve obviously built some sort of brand [00:57:30] and not just a product that is transactional, um, because that just, that’s just a weakness.
Josua: Yeah. So, uh, if you think about the e-commerce market and the Nordics [00:58:30] as a whole, you know, just separate from, from this, obviously this big, big low cost, uh. Competitive pressure coming from China.
Josua: But, uh, how do you think about e-commerce penetration and maybe consumer customer behavior? How is that gonna evolve over the next couple years and is there [00:58:45] gonna be major differences between the, the different Nordic countries?
Aida: I. I think there’s going to be a survival of the fittest when it comes to DTC.
Aida: We’ve never seen more companies go [00:59:00] bankrupt than we have in the last two years. The customers that are going to survive in the sector are the ones that are able to utilize AI and become a lot more efficient, especially when it comes to content creation. [00:59:15] Um, and really throughout the whole, um, organization and the way that they do things.
Aida: I think more and more companies will have to work in a very efficient. Way. Um, so I think there’s gonna be, um, a lot of clean out [00:59:30] of DTC brand. I’m being very harsh here, but I’m, I’m just telling what I think, you know, it’s very subjective and also just based on what I’m seeing, I think, I think there are a lot of companies that are just not going to, um, survive if they’re not doing things very [00:59:45] differently and just being agile enough.
Aida: Um, and that agility really comes from doing things in a more efficient way than you’ve ever done. Um, you know, you need to be more disciplined and smarter than you’ve ever been. Um, so, so e-commerce [01:00:00] penetration, I mean, e-commerce is always going to grow. That’s, that’s going to, you know, that is my main sort of motto.
Aida: That’s why I do what I do. Really. I invest in and I invest, you know, the whole thesis of our investment strategy is, uh, uh, more of, of [01:00:15] retail is going from physical to digital. Um, so, uh, the e e-commerce penetration, and we’ve seen it increasing across, uh, many different sectors, whether it’s food online or, or, um, or apparel or whatever.
Aida: I mean, you’re seeing more nicotine [01:00:30] pouches being sold digitally. You’re seeing more pharmacy, pharmacy, um, products being sold, um, online and so on. So it’s definitely increasing across most sectors. Um, but, but as I said, you know, there, the, the bar is just so high for a DTC [01:00:45] brand. I think starting a DTC brand now in a very crowded market is, is, um.
Aida: I, I don’t wanna say dangerous, but you need to have a certain niche. You need to have something that you stand for that doesn’t already exist. So I’m not, I’m [01:01:00] never gonna say it’s impossible, of course not. But you, you need to be smarter about, um, your reason for why. If you don’t know your why, then you probably should do something else, a different product.
Aida: You need to have a why, for why you are, [01:01:15] um, you know, selling a certain product these days, unless you’ve, you know, you’re innovative and you found something that’s never been, you know, done before. Uh, but now I’m mostly talking about, you know, the, the D two C brands, um, that are, um, typically a lot of right.
Aida: [01:01:30] Um, the, the majority. Um, so, so yeah, I would say that. I I, the bar is just gen generally a lot high. I see a lot of D two C brands succeeding a lot on certain channels, but those are not necessarily going to be the ones that I’m interested in. I’ve seen a lot of super [01:01:45] impressive brands selling, you know, they’ve come up to 5 million euros in one year.
Aida: Uh, just selling through TikTok. Um, and I, you know, of course that could still be a sustainable long-term brand, but it’s just not always, you know, it’s just not good enough for us as investors. [01:02:00] We need to see that there is, you know, sustainability in that growth rates.
Josua: Totally. We’re almost out of time, so, uh, final question for you.
Josua: Uh, what are you kind of personally most excited about? What are you paying most interest, uh, [01:02:15] paying most attention to right now? Is there kind of, uh, is it ai, is there some specific, you know, channel? Is there anything that kind of, you’re, you think that, uh, is gonna be really, really kind of big in, in the coming year or years?
Aida: Um. [01:02:30] This is a great question. I think, as you know, e equity as investors, as I mentioned in the beginning, we’re doing more and more of, you know, not necessarily the D two C brands, so we’re looking a lot more at enablers for D two C, right? So we’re looking [01:02:45] at the B2B solutions. Um, the, the, the predictable cash flow.
Aida: Um, the software companies that we find interesting that complement, um, our strategy, right? So there’s always going to be retail, um, [01:03:00] you know, at the core, but they are just enablers for retail. So we, you know, personally are doing more of these kind of investments. Um, with that said, we’ll never stop doing consumer.
Aida: That’s really what we love. Um, but for us to do consumer, as I, as I mentioned a little bit earlier, we [01:03:15] need to see that there is a certain niche, a certain focus. Um, we need to see, uh, you know, strong loyalty and, and really, you know, a brand being able to sort of build a community. Um, and we see those kind of brands all the time and, and they look great.
Aida: So, um, we’re always [01:03:30] gonna continue doing, um, consumer brands. Um, but uh, I think the bar is just a lot higher. And, and, and, you know, investing in, in a generic fast fashion brand, I don’t think that’s gonna happen. Um, I think you need to be very unique, um, to [01:03:45] really be able to succeed because it’s just extremely saturated.
Aida: Um, so, so, I mean, looking for niche, we, we love hobby brands. We, we, we invested in a company called McCade. They sell, um, golf apparel. So it’s still apparel, but it’s very niche [01:04:00] within golf. I’m looking at a different company right now that sells, you know, cleaning, um, cleaning, uh, products. And, you know, uh, I’m, I’m still trying to like wrap my rad, uh, wrap my head around whether it’s a trend, you know, the, the clean Tuck trend or it’s actually a sustainable brand.
Aida: You know, that’s [01:04:15] always going to be a challenge when we look at consumer brands. But, um, you know, financially they’re, they’re, they’re looking very, you know, attractive. So, um, yeah, the more niche you are as a consumer brand and you’re showing all of the different metrics that I mentioned, then the more interesting you’ll be to us, the more generic you [01:04:30] are, the less interesting to.
Josua: I think that’s a really good way to wrap up our conversation because I feel like we’ve covered a lot of really practical things and I hope people who are in in the space have been taking notes and hope finished brands are reaching out to you. Because you said, [01:04:45] I think you mentioned that you’ve done one investment in Finmark.
Aida: Yeah. So, um, obviously we are a, a Nordic focused investor, so we, we look at companies across the Nordics, typically Finland, we see great software companies. You, you, you know, uh, Finnish people are great, um, [01:05:00] developers. So we, we do have one software company in, in our portfolio called vam based in, in Finland.
Aida: Um, but other than that, we haven’t managed to find many, you know, DTC brands in Finland, unfortunately. Mm-hmm. I know there are obviously some very successful ones, [01:05:15] but it’s mostly been B2B or software companies that we’ve been able to find at Finland.
Josua: Okay. Let’s hope, I hope that, uh, changes and hope this episode will help be part of the change.
Josua: Yeah,
Aida: I hope so. I hope so too.
Josua: Yeah. Well, Ida, thank you so much for taking the time to come on. Really, [01:05:30] really enjoyed our conversation and, um, yeah, wish you and the team at e Equity all the best, uh, with the rest of the year and in going into 2026.
Aida: Thank you so much. Thank you.