In less than seven years, the Swedish company Twistshake has grown rapidly to become one of the world’s best known baby brands, earning revenues of SEK 300 million in 2021. With an expanding range of baby bottles, cups, furniture and accessories, Twistshake has revolutionised the industry by focusing on innovation, function and aesthetics for each product. Today, around 80% of the company’s sales are from exports to key markets in Europe, the Middle East, South America and Asia.
Camillo Eriksson, CEO of Twistshake, says: “Twistshake was started by myself and our founder Vienar Roaks, perhaps two people you wouldn’t expect to be running a baby business! We were both busy working and spending time in the fitness centre and we didn't have any kids of our own. The history of Twistshake begins in 2011 when Vienar was babysitting his niece for the first time. That was the first time he ever used a baby bottle and he realised it was actually a very cumbersome task with the lumps in the formula, lots of spills and lots of cleaning up to do. He didn't think too much about it until winter 2014 when he saw a mother walking by with a stroller. The baby wanted feeding and as the mother reached into the pocket of the stroller to pick up a baby bottle, a plastic bag with formula powder and an insulated bottle, in her haste she dropped everything on the ground. Vienar rushed over to help and after everything was fine again he got a flashback to when he was babysitting. He thought for himself all day and the same night he called me and said - I have a great idea, we're going to make a baby bottle!”
Finding out what is needed
With the idea for a company now in place, the next step was to try to get it off the ground. This included a steep learning curve for running a business and a first discussion of the idea with Nordea.
Camillo says: “In the beginning we didn't know anything about product development, sales, marketing or anything. We're very committed and we’ve always thought and believed in our own ideas. We needed to understand, what does it mean to feed a baby? So we gathered around one hundred parents to get some insights and understand whether there really were actual issues with baby bottles. When we completed our research we found out that parents had all sorts of challenges. We also looked at the baby bottle industry in general and realised most products on the market were very dull in terms of design. We thought to ourselves we want to make something different, something functionally innovative designed in a fun way. We included elements such as a mixer net and storage container, small things but very important to improve the user experience.”
“When we first showed our idea to Nordea, we had nothing except a presentation to show them. We worked with Almi, the state owned Swedish company incubator and along with Nordea they helped us raise enough finance to produce our first stock of products. We've been working very, very closely with Nordea from then on. Whilst we are always heavily focused on the day to day running of the company, Nordea has always kept us focused on things that would happen in six months to a year’s time and the options available to help Twistshake grow. Nordea has been a really great support.” adds Camillo.
Whilst we are always heavily focused on the day to day running of the company, Nordea has always kept us focused on things that would happen in six months to a year’s time and the options available to help Twistshake grow. Nordea has been a really great support.
After launching the company in their home country of Sweden, Twistshake quickly began to offer their baby products in other countries. To ensure that exports could flow in a smooth way, Nordea advised Twistshake to use export Letters of Credit, guaranteeing that payments from buyers of Twistshake products would be received on time and for the correct amount.
Gunilla Cederberg, Trade Finance Adviser at Nordea, says: “We advised Twistshake on what to think about in terms of risk and working capital at the very beginning to give them a good general view. I think many companies at the start don’t know so much about trade finance and the solutions that are available. With Twistshake growing a lot, we could see there were areas where we could support both their imports and exports. When they were selling in overseas markets, the export Letters of Credit really helped a lot to reduce the risk of not getting paid.”
Johan Dahl, Senior Relationship Manager, adds: “We saw the bigger picture pretty early in the process and we could see that Twistshake really needed to optimise cash and liquidity in order to expand. As the company was just starting out, ordinary credit facilities were not possible but trade finance solutions like Letters of Credit were very helpful. At this stage of a company’s development I think it’s much easier to grow with trade solution services rather than ordinary credit. First of all, we needed to as ascertain where we could assist Twistshake’s purchases because they would've had to pay upfront before they even got any goods. Nordea guaranteed payments to suppliers by setting up import Letters of Credit as well.”
Camillo says: “In 2015, to help our overseas push, Nordea arranged Letters of Credit from customers buying products from us. This worked out really well and we didn't use them the other way around for our own purchases until we went to China to negotiate with our manufacturers around payment terms. This was in 2019 and we began to use the Letters of Credit towards our suppliers as well. That really exposed us to working with Letter of Credits and the different scenarios that were available. Letters of Credit can be used either as a loan with Nordea or we would have the supplier give us X amount of days and they would have to factor out the cash in some serviceable way.”
With Twistshake growing a lot, we could see there were areas where we could support both their imports and exports. When they were selling in overseas markets, the export Letters of Credit really helped a lot to reduce the risk of not getting paid.
To help Twistshake export products to markets further afield, the Swedish Export Credit Agency EKN were on hand to provide further support.
Gunilla adds: “As Twistshake grew, EKN helped them to expand into more distant markets. Nordea added a receivables finance service with a guarantee provided by EKN. This enabled Twistshake to extend credit to their customers without acting as a kind of bank themselves as they were selling the receivables to us. On both the purchasing side and sales side our trade solutions helped Twistshake to optimise their cash flow and working capital.”
Camillo says: “The whole process really helped us think about how we wanted to structure our company and how we wanted to measure its progress. By selecting the right services it made it a lot easier to steer the business. For example, if we turn our stock four times a year and we receive 90 days payment terms from the suppliers, we really don’t need to worry about cash flow at all provided we have some kind of profitability as well. Really we are taking out a lot of the constraints that can tend to push back the business.”
Throughout our company journey so far we have been focusing on building a brand, marketing the product and selling the product. Then whenever we run into an issue or have a problem, it's always been great to receive support from Nordea.
Camillo concludes: “Throughout our company journey so far we have been focusing on building a brand, marketing the product and selling the product. Then whenever we run into an issue or have a problem, it's always been great to receive support from Nordea. Not just how you should think about things but also the actual service and solutions themselves. The onboarding has been really flawless. In the future, we will be looking at factoring so that we can free up as much cash as possible to invest in more stock and further finance our growth as quickly as possible. What we've done in the baby industry has never happened before. We've launched into 42 different products segments in the seven years we've been on the market. We're also the biggest brand on social media in the baby industry. Throughout our company journey so far it’s been super valuable to have Nordea alongside with us.”
For more information about Trade Solutions at Nordea, please write to Gunilla at gunilla.cederberg [at] nordea.com (gunilla[dot]cederberg[at]nordea[dot]com).
You can read more about Nordea Trade Solutions here.