The platform was launched in Denmark in 2022, and the management now sees great growth potential both domestically and globally. To be able to grow, you need to own the company. The customer experience is now in focus to be able to continue to expand; second-hand shopping must be safe and easy to get more people to do it.
Tradera is a well-known market place in Sweden, but its focus and owners have changed over time. When Tradera was first launched by Kaplans Auktioner in 1999, it was only a market place for private individuals. When E-bay, which at that time also owned PayPal, bought the company in 2006, the business strategy was extended to cover businesses as well, with shopping including both new and used items.
Today Tradera is first and foremost a market place for private individuals, but it is also a market place for trading between small businesses and private individuals, and its focus is mainly to encourage us to recycle things.
“When we entered the company in 2013, Tradera was not doing very well and one of the first things we did was to change the strategy to mainly make it a market place for private individuals. We didn’t want to focus on new items at full price and in season, but rather on unique or inexpensive items. We usually call it Re-commerce or ‘återbrukshandel’ in Swedish,” says Stefan Öberg, CEO of Tradera.
Largest Nordic circular market place
Today Tradera is the largest market place in the Nordic countries with more than 3 million members, 6 million visits every week and 4 million active auctions every day. Tradera’s mission to focus on recycling and a circular economy is a very hot current topic, and the growth potential is huge.
”I believe there is massive focus on sustainability in Sweden compared to many other countries. But there is still a lot to do. According to E-barometern more than 50% of all consumers have still not shopped second-hand items online. So there is great potential both in Sweden and in other markets,” says Irene Werge, CFO of Tradera.
Tradera is set to grow in Sweden and in new markets. In the autumn of 2022 Tradera was launched in Denmark.
”We started there because there was already a flow of sales from Sweden to Denmark and the taste in home decoration and clothing was fairly similar. We want to start with one market and become successful there before moving onto larger markets where we can build on our experience. After Denmark it’s not certain that Norway or Finland are next in line, as we might expand to a larger market,” says Stefan.
Tradera’s management team acquired the company – starting signal for accelerating growth
At the end of 2021 Tradera’s management team acquired the company from the financially strong PayPal. The driving force behind the acquisition was mainly that the management team had bigger growth ambitions than the owners. In line with Nordea’s report The Ideal Owner, Stefan underlines the importance of having a long-term strategic investor as owner.
“It was something that we had wanted to do for a long time. E-bay bought Tradera in 2006, which was before we came into the picture. But in 2015 PayPal and Ebay split, and we became part of PayPal. We quickly realised that it was not a long-term strategic investment for PayPal. We bought the company because we had bigger ambitions and belief in Tradera than the former owner,” says Stefan.
A prerequisite for a so-called management buyout – where the management team buys the company and turns it into an independent company – is of course that the owners want to sell. And that was the case here.
”It was well in line with PayPal’s ambitions; they realised that Tradera was not a long-term investment and were interested in selling it with as little effort as possible. And then we were a great alternative; we wanted to buy and they wanted to sell and we were a good solution,” says Stefan.
For Tradera it was also important to have a great banking partner that could guarantee financing when they were ready to make a bid. Loan financing also helped to avoid dilution.
”For us it was important that we had a good relationship with Nordea from previous activities, and that we had been transparent about this possibility and discussed it in detail for a long time. So when the transaction began, it went really smoothly,” says Stefan.
It was also an advantage for Tradera’s management team that they had worked for the company for a long time. They knew each other and the company. But it was still important to prepare for any eventuality that could occur between the new owners.
“It’s really important that you’re in sync. How much money should each person inject, how large should the ownership stake be and what should our perspectives be,” says Irene.
In October 2022 Ceder Capital bought into Tradera, making it possible for the company to accelerate growth.
“When we acquired Tradera, the five of us in the management team fully owned the company. With the investment from Ceder, we can expand faster, and it also enabled us in the management team to reduce our personal risk as we had tight personal finances,” Stefan explains.
Focus on customer experience to get more people to buy second hand
To get more people to buy second hand, Stefan and Irene emphasise that the shopping experience must be smooth and safe. The barriers to second-hand shopping must quite simply be lower.
“It should not be difficult and it must feel safe. There should not be any risk of getting poor quality or the wrong product. That’s why we offer buyer protection: you pay a little extra to be sure that you get the item as described or you get your money back,” says Stefan.
It’s also important to have a good payment solution for both buyers and sellers.
“The customer must recognise the payment solution from other online shops. And it needs to be easy for the seller to receive payment. We have our Swish solution with Nordea, and we have also been licensed as a payment institute with Nordea as the intermediary,” says Stefan.
A broad offering is also the key to a better customer experience. And this is an area where Tradera sees great potential for working with large retailers that want to become more circular.
“Many retail brands want to become circular, and we can be their platform. You might be very good at producing and selling new items, but handling circular trading is an entirely different business, which they often don’t want to get into. But we have solutions for that, so they can take responsibility for the products also after the first sale,” says Stefan.
“We want to get more retailers, second-hand shops and NGOs on board, and we’re open for business. Everybody who is selling stuff but wants to become more circular is very welcome to contact us,” says Stefan.
Points to consider if you’re considering a management buyout (MBO)
An important aspect of executing an MBO is to ensure financing. Tradera was supported by Nordea Business Banking Stockholm and its specialists within Corporate Advisory.
- At Nordea we’re very proud and happy that Tradera’s management team trusted us to give advice and provide financing. The team consisting of a relationship manager and our specialists did an amazing job in making it possible to complete the acquisition and, at the same time, creating a foundation for Tradera to continue developing and contributing to a more sustainable society.” Mikael Moraeus, Head of Mid Corp Stockholm, Nordea.
Make sure that the basic requirements for an acquisition exist; will the owners sell? Is the company not strategically important for the owners?
- Have a discussion with the owners and be open about ambitions and intentions.
- Start the discussion with your banking partner at an early stage and make sure financing is in place in good time.
- Ensure that you agree with other owners about your ambitions and other eventualities: Agree on questions such as how much money will you inject? What happens if someone falls ill?
- Get help from experts to get a fair valuation of the company and get the necessary agreement in place.
The ideal owner – a study from Nordea
A company’s ownership structure can affect its financial results. So who are the perfect owners? Nordeas Thematics team has crunched the numbers in the Nordea On Your Mind report "The Ideal Owners".
Read more about the results of Ideal Owner