Budbee CEO Fredrik Hamilton, 31, already talks about IPO


Fredrik Hamilton, 31, CEO and founder of the Swedish delivery startup Budbee AB expects his business to start making money next year, which will likely pave the way for an initial public offering.

“We’re going to be profitable next year, at the group level,” and after that, “I really think we’ll be looking at a roster at some point,” Hamilton said in an interview. “I want to build a European giant.

Biggest owner of Budbee is a Swedish investor in consumer tech Kinnevik AB, which owns nearly 30%. At the end of last year, Kinnevik injected more capital into Budbee along with another early-stage investor, the fashion retail giant Hennes & Mauritz AB, which owns an 8% stake. The AMF, one of the largest Swedish pension funds, also recently bought back its stake and now holds 9%.

Hamilton, who owns 19% of the company, says he and his team “absolutely want to broaden the ownership base.” As of December, Budbee was valued at around 2.7 billion crowns ($ 324 million). It’s “worth a lot more today,” says the CEO. Kinnevik’s first quarter report shows that the investment firm valued Budbee at around SEK 3.4 billion at the end of March.

Founded in 2015, Budbee has yet to make a profit. The company lost 84 million crowns last year on sales of 400 million crowns. Management continues to invest to meet demand and Hamilton says he feels “Comfortable” predicting sales of over a billion crowns this year.

Raising capital

Budbee will consider raising capital in the second half of 2021 to fund its growth in more European markets, Hamilton said. For now, the company operates in Denmark, Finland, Sweden, Belgium and the Netherlands.

This year will be the year of construction. We have yet to receive a dime of the funds we raised in December. We are constantly listening to the capital market, but we will embark on a more structured process later in the year if we see interesting opportunities. “

The company must also prove that its business model is not exposed to the kinds of work-related issues that have tainted the reputations of some other delivery companies. Earlier this year, Deliveroo Plc has plunged more than 30% after its IPO amid concerns over corporate governance and labor practices.

Deliveroo's disappointing IPO

Budbee himself has been criticized by union leaders in Sweden in recent months due to its lack of collective wage agreements. The unions say drivers should have contracts similar to those offered by DHL International GmbH and PostNord Sverige AB.

Hamilton says Budbee offers better pay than workers can get through union deals.

“The reason we don’t want to sign a collective agreement – it’s not that we don’t respect pay – we actually have better pay than collective agreements,” he said. “On the other hand, agreements reduce the flexibility the business needs. I’m incredibly proud that we, as a new player, can still have such good conditions. “

Budbee’s CEO also says he’s keenly aware that investors will pay close attention to a company’s societal impact on the community in which it operates. It is then that environmental, social and governance objectives are increasingly enshrined in the regulations by which companies and asset managers must operate.

“The S of ESG is incredibly important,” he said. “We’ve been working on this since day one. I couldn’t sleep at night if I exploited someone.

In addition, Hamilton says that Budbee “will never work with Amazon.”

“Amazon is good at what they do,” he said. “But we want to work with our e-merchants as partners … we want to focus on our customers, not on a player that we don’t know will be a long-term customer for us.”

(Adds information about Deliveroo actions)

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