Today, Kauppalehti wrote that the Finnish computer electronics store founder and owner Samuli Seppälä is going to take the company public in a few years time. He’s doing this with the help of the Swedish private investment company Rite Internet Ventures who have invested 3 million euros to the company with a 15% stake. This brings the company’s valuation to a mere 20 million euros. Why do I say a mere 20 million euros, you might ask. The reason is simple, the company’s 2008 turnover was about 140 million euros with 2,4 million euro profit before taxes and amortisation.
The reason why this matter’s to the startup industry is simple. Samuli Seppälä is to become a private investor with his exit from the company, according to the Kauppalehti article. The man is a legend and has clearly earned his success with the company. The fascinating thing is that he has managed to hold on to all the stock himself and thus Rite Internet Ventures is going to be his first co-owner of the company stock.
The story behind the company isn’t a quick one, but it’s a solid statement of how a successful company is built. Seppälä started the company in 1992 when he was just 16 years old. Today, the company employes more than 300 people and has been known to disrupt the home electronics market every now and then. For example, Verkkokauppa.com launched a set-top-box of their own during the transformation to the digital signal broadcasting here in Finland and the price for the box was considerably below 50€ beating all the other boxes on the market. They also claim that they now have 25% of the GPS market in Finland with their own model.
From these points of view and with this background. I can only congratulate Rite Internet Ventures for a great investment. While Seppälä is set to become a self made millionaire, he could have earned a lot more in the IPO they’re planning in the near future. A 20 million euro valuation for this kind of a company is well below the fair market value. Nevertheless, having to battle with these sort of issues with yourself only is never easy and I bet Seppälä has had some sleepless nights thinking which way to go with the offers for the company stock.