Tallinn-based Fairown has secured €5.7 million in a seed extension round. The funding, led by BONVENTURE and supported by neosfer, STIHL Ventures, and Gateway Ventures, will be used to expand Fairown’s operations in Germany. The company, which operates in nine European countries, plans to enhance its product offerings and scale its service in the German market. Fairown’s subscription model is designed to offer consumers flexible access to various products while promoting sustainability and circular economy practices. The funding will help Fairown launch its service in the German household appliances sector and strengthen its partnerships with major brands such as Bosch and Apple Premium Reseller FundK.
Fairown is a multi-category subscription service provider based in Estonia, known for its innovative approach to managing the lifecycle of consumer products. Their Buyback system addresses the challenge of disposing of old items by purchasing them back, refurbishing them, and finding new uses. This service combines credit and buyback options to simplify the process for consumers who wish to part with their old products.
For merchants, Fairown’s system offers a way to enhance business stability through repeat customers and additional revenue from refurbished goods. It also reduces environmental impact by extending the lifespan of products. Operating in nine European countries, Fairown’s service is utilized by a substantial number of consumers and has been recognized for its contribution to the circular economy. The company collaborates with well-known brands, facilitating a shift towards more sustainable consumption practices.
Paul Garte, Investment Manager at BONVENTURE, stated, “We believe the share of product subscription models to increase significantly. This will change the way precious resources, embodied in hardware products, are treated. The concept, also known as Product-as-a-Service, incentivises the design of long-lasting, as well as better repairable and recyclable products. Customers benefit by paying for the actual usage and avoiding hidden costs associated with product degradation and disposal.”
Fairown has just launched product subscription in the German household appliances market with BSH BlueMovement, representing the world-renowned brand Bosch. The subscription service also has enormous strategic importance for tech giants like Apple. Hence, one of Fairown’s early customers in Germany is Apple Premium Reseller (APR) FundK.
The implementation of the subscription service has been made as easy as possible from both the technical and financial side. It combines product buyback and credit, but is still an asset-light solution for merchants. The credit risk is carried by Fairown’s partner banks.
Hendrik Roosna, CEO and Founder at Fairown, said, “I’m happy to welcome FundK to our family of Apple Premium Resellers that value the circular economy. We already partner with APRs in the Baltics, Norway, and Poland. High interest towards an easily scalable and sustainable solution, and support from our financing partners in Germany, Commerzbank and Targobank, has proved that there’s a market gap for this solution.”
Wolfgang Papé, General Manager at FundK, added, “The decisive advantage of the cooperation with Fairown is additional customer loyalty for our business. It’s increasingly important to identify customer groups whose behaviour is not yet reflected in the purchasing process. These are people who like to use the latest Apple products for 1-2 years, and upgrade to new ones. The Clever Rate subscription program allows them to do exactly that, affordably.”
Premium brands and retailers seek to offer Fairown’s B2C subscription service to make their products more affordable, provide consumers with a flexible way of ownership, and steer consumption to a sustainable, circular model. Main advantages of subscription compared to rental are that merchants own their customer relationship and consumers get a much lower monthly cost.
Fairown’s subscription service has high traction across Europe – 100,000+ consumers prefer it to any other payment option. For merchants, it brings recurring sales, increased customer loyalty, and lower environmental impact across the board, from consumer electronics to household appliances, garden tools, and micromobility.
The service also endorses circularity and product reuse, solving a burning problem, especially in the German market. The circular material use rate in Germany succumbs to many EU countries, levelling at just 13%, while climbing to 27% in the Netherlands.
Roosna commented, “Our product subscription service allows merchants to scale and rapidly serve large markets. With the strong backing from our investors, our mission is to make its benefits available to more and more merchants and consumers in Germany.”
Matthias Lais, Managing Director at neosfer GmbH, added, “When we invested in Fairown in 2021, we did so on the assumption that the business model would soon be relevant for customers and merchants in Germany. We are happy to see that our initial investment hypothesis stands and Fairown is now conquering the German market.”
There’s huge future potential for product subscription models across categories and markets. According to Komplett, the largest e-commerce player in the Nordics, a growing number of their customers prefer to buy smartphones with Fairown’s subscription plan.
Komplett has the longest track record of partnering with Fairown to offer product subscription. They launched the solution called FLEX in 2021. It took just 2.5 years for it to make it from zero to hero: to gain 50% of market share in the smartphone category, marking a massive shift in consumer behaviour.
Among others, Fairown’s subscription is offered by the power and garden tools manufacturer STIHL, and a Norwegian e-bike rental company, Sirqel. Sirqel launched the subscription in just two weeks and converted a large share of customers to it in a few months.
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Read the orginal article: https://arcticstartup.com/fairown-raises-e5-7m-seed/
