Finnish startup Yepzon is not your average startup. When Otto Linna climbed to the stage of Start Tel Aviv pitching competition last year, he was doing it for the first time. And so far for the only time – his win rate is 100% having won the event.
Sometimes startups are born as spinoff projects of technology companies – but not children clothing companies like Yepzon. It started from a simple idea of making location-aware children clothing.
The idea was born in the fall of 2013, but soon the team understood two things – clothing firm was not the place for technology development, and the technology was not ready yet for mass-adoption. Linna is confident this will happen, but the company came to market first with a GPS gadget sharing the location of a child.
Yepzon launched the product for finding your child late 2014 and started selling it through electronics stores in Finland and Italy. Soon the team noticed the product was used also to keep track of the location of pets, cars, boats, elderly – and refocused marketing to “a family product”.
Since winning the Startup Tel Aviv competition in 2015 the startup has seen a sales surge, with the product selling now across Nordics, and Spain, Britain and the United States on top of the launch countries. Total sales of 15,000 products might sound little, but in the fast emerging market niche, they are one of the big players globally.
The award for winning the competition was a trip to meet Israeli startup community, something Linna remembers as an extremely interesting learning experience.
“In principle, as startup countries, Finland and Israel are really similar,” Linna said in an interview.
“The big differences come from the US-centricity of Israeli startups. Many of them see U.S. as their home market,” said Linna.
A number of successful listing and industry sales have pumped capital into the startup sector, enabling larger initial investments, which allow startups to launch faster.
“Investors risk-awareness is very different. In Finland you have to make a lot of small investment rounds, losing a lot of time on this. At the same time investors often are looking for quite a fast exit, in comparison in Israel there is a clear long-term target of a U.S. listing,” Linna said.