Oy Slurp Ab

Short profile

Company Data

Company history

It all started with a cup of good coffee. Founder Manuel Linnankoski and his friends were presented with an Ethiopian speciality coffee, which you couldn't even recognise as coffee at first sight but tasted heavenly. They fell in love but ran into a problem instantly. Although roasters were plentiful, ordering similar speciality coffees online was difficult.  

We have come to expect solemnity from our coffee, golden cup rims and elegant steam rising elegantly to the sky: images and atmosphere. But Manuel and his friends wanted more, and curiosity led them to search for the essential quality: taste. 

Manuel, Rafael and Tero found a shared vision for the future of coffee in the summer of 2014, and Slurp was born. Their insight was that any coffee consumer would fall in love with the taste of specialty coffee if only they could taste it.  

Slurp started by delivering domestic small roasters' coffees directly to customers' letterboxes. Website visitors could choose their preferred coffee subscription, amount and grind. There was no similar service in Finland and, as far as we know, not many in the world. In Slurp's first customer survey, 99% of the respondents said they would recommend the service to others. 

Milestones

• In 2017, Slurp validated its business model with significant growth as customer retention continued to develop positively.  


• In 2018, the company recruited its first coders and started developing a platform technology to automate and scale its business.


• In 2020, most fundamental development projects were completed, enabling the platform's localisation to new markets, internationally scalable orders processing and logistics. In the same year, driven by strong growth, Slurp's online store expanded to Germany, Japan and the UK. 


• In 2022, the company launched a significantly improved version of its B2C e-commerce platform technology.


• In the first quarter of 2023, the company is preparing for the launch of the B2B platform.

Services

Slurp believes that a critical element of future consumption will be eliminating repetitive purchasing decisions required from consumers. As a result, the company offers consumers a unique experience: the possibility to subscribe to premium coffees in regular deliveries tailored to the consumer's preferences.  

What's revolutionary is that consumers don't need to know coffee brands or suppliers worldwide. Instead, all they need to do is identify their taste profile. Slurp then connects them with the world's best coffee suppliers and uses machine learning to serve customers with the most suitable products. 

All Slurp coffees are always selected and roasted according to the customer's taste preferences and delivered immediately after roasting.  

What sets Slurp apart from other players in the industry: 

• A comprehensive supplier platform for order processing and logistics automation. Enables local producers to increase sales and reach customers internationally efficiently.  
• A personalised buying platform that allows B2B and B2C customers to purchase and consume world-class coffees based on their preferences.  
• Convenient subscriptions, with each delivery selected according to the customer's preferences, enable a new way to consume and enjoy coffee.   

How it works

Awards & press

Excellent user reviews (31.12.2022)

Business model

Concept 

World-class coffee enjoyment in one click: Slurp offers consumers and business customers direct access to premium speciality coffees. 

Technology 

Slurp has built its technology from both a buyer's and a supplier's perspective. The customer side is a progressive web application (PWA), and the coffee supplier side is a cloud platform.  

Data-driven learning

The technology used by Slurp collects feedback and enables consumers to identify which coffee is most likely to suit each shopper. 

B2B and B2C 

There are many synergies between Slurp's B2C and B2B services. Both use the same suppliers, the same software and the same brand. 

Deep coffee expertise 

Slurp’s passion for coffee and careful testing ensure that only the best products are selected and adapted to individual customer groups. 

Powerful customisation 

Slurp's platform customisation options give the customer the freedom to choose the type of coffee, the form of the product (ground/bean), the taste preference and much more. 

Repeated purchases 

65% of Slurp's sales are subscription-based. Tailored coffee subscriptions make it easy for coffee lovers worldwide to discover speciality coffees and new roasts. 

Customer satisfaction 

The platform's 97% customer retention rate and 71 Net Promoter Score (NPS) show how much customers appreciate their personalised subscriptions. 

Internationally scalable platform strategy   

Each new market brings many benefits for Slurp, including new roasters, a more comprehensive range of products and new buyers for the platform. The more buyers using the platform, the more suppliers will want to join. This goes both ways and creates a network effect once a critical mass is reached. 

Team

Board of Directors

Wilhelm Lindholm, Chairman

Wilhelm is the Managing Director of Innovestor Group, a group focused on early-stage venture capital investments. Previously, he worked in corporate finance at Nordea, ABB and his own company. Wilhelm also serves on the boards of several Finnish growth companies. 

Pyry Laakso, member of the board

Pyry is a passionate entrepreneur and Sales Director at Aito, a company dedicated to transforming the customer service and company culture of the building services industry into the best in the world. He has a strong passion for sales and years of solid experience as a top salesman. 

The Annual General Meeting has decided on 5 January 2023 that Pyry Laakso will be elected as a member of the Board of Directors to replace Johan Brear. The registration of the replacement has been filed with the Trade Register on 17.1.2023, but the registration process is still pending. 

Olli Kopakkala, member of the board

Olli is a digital marketing expert and one of the founders of Ukko.fi. Olli is also a board member of several Finnish companies and is heavily involved in startup investing in Finland. 

Owners 

Heinon perhe, investor 

The Heino family (Torkkis Oy) has become one of Finland's most active food technology investors in recent years. 

Sejungin perhe 

The Sejung family (Kyung Kyu Kim and Yira Park) run a billion-dollar fashion company in Korea and elsewhere in Asia. Recently, the family has been active in private equity, allocating their wealth to Western markets. 

Innovestor  

Innovestor (Innovestor Growth Fund II Ky) is a Nordic early-stage venture capital investor. The company currently manages €130 million in three venture capital funds. 

Insta Ventures 

Insta Ventures (INSTAVC LTD) is a venture capital firm looking for technology start-ups in their products' development stage.  

Structure of the company

Distribution of the company shares

Development of the company since the last crowdfunding round in 12/2021 

1. During 2022, Slurp invested in improving the profitability in all markets, improving the burn rate (negative cash flow) from around -€60 thousand to approximately -€7 thousand per month. At the same time, the company succeeded in maintaining the margins at the level of previous years. As a result, the company expects the cash flow to become positive in Q2-Q3/2023.


2. As a major growth project, the company launched the B2B platform development and the efforts to scale the B2B business. Following the lifting of corona restrictions, the company has invested in B2B business with good results. The launch of the platform, expected in February 2023, will open up new growth opportunities, especially in online sales, and support the rapid growth of the B2B business.


3. The company has been able to improve its unit economics metrics in terms of both customer retention and ROI: LTC/CAC 9.3x (B2C) and 5.6x (B2B).


4. With the war of aggression in Ukraine, rising inflation and other changes in the economic environment, the company has focused resources on developing the business and building solid foundations in existing markets in Finland, Germany, Japan and the UK.
    

Use of funds

Slurp's target size for the funding round is €500,004.08, which the company will use to scale its B2B platform, digitise its sales, strengthen its market position, and accelerate its international growth. 

The company will maintain stable growth in all scenarios and aim for positive cash flow. However, the timeframe the company will implement its international platform strategy will depend on the amount of funding raised. 

According to a Forrester study in 2018, more than 70% of B2B buyers consider buying from a website more convenient than buying from a sales rep. 

McKinsey's report states that the impact of the COVID-19 pandemic has triggered a lasting digital transformation in the B2B market. Data shows that 80% of B2B buyers do not plan to return to personal selling even after the pandemic. 

Markets evolve in waves 

The retail coffee market has gone through several periods of renewal and innovation. Various markets are at different stages of development in terms of consumer understanding of the product, professionalism of the category and innovation. These phases are called coffee waves.   

Slurp aims to address the challenges in the market.   

World-class coffees have never been available to consumers in a simple way that considers personal preferences.   

• Quality is still neglected in today's retail sector. 

  • Large chains are optimised for yield and scale maximisation. 

  • High-quality, specialised products are not available to the masses. 

  • For example: special premium coffees and teas are hard to find in most shops



•  Department stores are not optimised for certain products, such as coffee.

  • Product preferences are not collected, which makes it difficult to make recommendations. 

  • Consumers find it difficult to find new products that are likely to meet their tastes. 

      

• Local suppliers of speciality coffees cannot often reach customers profitably and organise distribution outside their local area. 

  • International sales and marketing are not prior 1, and the supplier focuses on local store customers. 

  • Organising international and domestic logistics is challenging and expensive. 

  • Suppliers do not get the attention they need at large retailers. 

Competitive differentiation and unique selling points 

Slurp's competitors include local coffee roasters and a few traditional e-commerce sites. The former has difficulties accessing customers outside their local community, while the latter often lacks quality and personalisation. For example, in general, speciality coffees are not available in traditional online shops. And even when they are, it is difficult for consumers to know how speciality coffees differ and which one suits them best. For such products, expert input and deep personalisation are essential. 

Wide range of products 

• Slurp is revolutionising the B2C and B2B coffee markets by providing consumers and businesses with fast access to sustainable, world-class coffee products out of the reach of the international masses. 

• Convenient orders, with quantities tailored to daily consumption, provide hassle-free delivery of the product you need daily. 

• Local specialised suppliers offer the best quality products but have no practical way of reaching audiences outside their own region. This is because they focus on making great coffee, not on large-scale sales and marketing. Slurp connects these producers to international markets through an intuitive interface and advanced technology. 

B2B platform responds to changing shopping behaviour 

• Slurp connects producers directly to business customers, allowing organisations to order high-quality coffee now to their offices quickly and cost-effectively. A personalised coffee selection improves employee satisfaction and signals employees that they are valued.  

• B2B customers can manage their online and offline orders in one place and see pricing and available promotions. 

• The new platform will help Slurp grow and scale its B2B sales to meet the market's demands and customer needs.   

• The platform is a particularly powerful tool for acquiring small and medium-sized customers online, and Slurp can also easily implement an automated cross-selling and up-selling referral program. 

Supplier Platform 

• Slurp's proprietary platform, Barista, offers local specialist suppliers easy access to international markets. 

• The cloud-based platform enables simple deployment and significantly increases the sales potential for local producers. 

• The logistics solution embedded in the Barista platform fully manages the process from end to end. All the supplier has to do is prepare the coffee according to the instructions on the platform. 

Making the purchase decision more effortless with a personalised experience 

• Slurp believes that in the future of e-commerce, consumers will spend less time thinking about what to buy. Instead, they will be offered what they are most likely to enjoy.  

• In Slurp's approach, the buyer states their preference. Then, after asking for additional information, the platform recommends a perfectly optimised product for the individual's taste. The complete offering consists of hundreds of different products within each niche sub-category.  

• When users provide continuous feedback on each product offered, the system becomes smarter about that person's preferences.  

Machine learning-based personalisation through intelligent data collection 

• Certain product categories (such as coffee) require greater personalisation to meet consumer needs. 

• Large grocery stores and retailers do not offer personalised products, so customers receive a sub-optimal shopping experience. 

• Slurp is entirely focused on intelligent data collection (coffee type, bean/ground, flavour and more) to ensure every user gets a coffee experience tailored to them. 

• Slurp will further develop intelligent data collection, making it possible to collect continuous feedback from users and feed it into decision-making algorithms. This will increase customer satisfaction and retention. 

International growth strategy 

• Slurp analyses global trends, value chains, cultural differences in coffee consumption, and local growth drivers in pursuit of different markets. 

• Slurp was founded in Finland but expanded to Japan, the UK and Germany in 2020.      

• Slurp will focus on growing profitability in B2B in the short term while increasing resources in scaling up in Japan, Germany, and the UK. 

• Automating the onboarding process for new suppliers will enable the integration of suppliers outside the primary market.

Europe 

• Europe is a large coffee market, accounting for around 35% of world consumption (3).     

• Europe has the world's highest annual per capita coffee consumption, with more than 5 kg of coffee per person per year.        

• Most European countries have entered the third wave, and there is a clear shift towards speciality coffee. In this light, the European coffee market is appealing to Slurp.        

• In Europe, Germany is the biggest consumer of coffee, followed by France, Italy, and Poland. These countries would therefore be ideal expansion options for Slurp. 

Japan 

• The Japanese coffee market is worth $30 billion (2020) and ranks among the top five coffee markets. Instant coffee remains the largest segment, with $22 billion (4).     

• In large cities such as Tokyo and Yokohama, the demand for high-quality coffee is multiplying. While speciality coffee channels are well developed in Europe, they are few in Japan, providing a unique opportunity for Slurp to gain a foothold in the market as a "first mover". 

• Slurp entered the Japanese market in 2020 with a customer retention rate of 95%.     

Go-to-market strategy 

Slurp is preparing new markets with a cost-effective "soft launch". The new market will bring many benefits to Slurp, including new roasters, a wider range of products and new buyers. The more buyers, the more suppliers will want to join the platform. This goes both ways and creates a network effect once a critical mass is reached. 

There are currently 70 suppliers on the platform, of which around 70% have joined on their own initiative. Slurp has found that once around five suppliers have joined a new market, the remaining suppliers become aware of the platform's benefits and contact Slurp to join.   

As soon as a new coffee roaster integrates into the service, its offering is available to Slurp's international customer base, and an automated system takes care of the logistics. Slurp's technology will automatically match the right coffee to a customer, and new players will mean wider opportunities to find a better coffee for each customer.  

For most suppliers, Slurp is the single largest and most important source of revenue. Suppliers using the Slurp platform have seen a revenue increase of up to 25% per year.  

The platform's features make deployment automatic and easy. The company's own Barista platform handles most of the heavy lifting for the supplier, such as attracting customers, processing payments, delivering envelopes and organising logistics (shipping, tracking, etc.). For example, suppliers only need to roast the coffee according to the instructions on the Barista platform and pack it in Slurp envelopes.  

Other possibilities  

Slurp has identified opportunities for cooperation with major equipment manufacturers. For example, in 2018, the company partnered with a well-known coffee machine manufacturer to offer their customers a limited Slurp subscription period by purchasing a coffee machine.  

Currently, the company is working on a collaboration project with Cuisinart in the Japanese market, which has been a great way to gain visibility and further strengthen its foothold in the market. (5)

The number of smart devices in people's homes is growing, and the integration of Slurp's services represents a huge opportunity. Whether it's an on-demand order for a single coffee or managing an existing order via a coffee machine, integrating the service with smart devices creates a frictionless consumer experience. Similarly, Slurp's personalised premium coffees enable device manufacturers to deliver a more valuable customer experience.  

The company expects the first larger contracts to be signed by the summer of 2023. Such projects, if completed, could deliver massive benefits in reaching new customer segments in existing markets and increasing visibility in new markets.  

Opportunities beyond coffee  

Slurp's platform and technology allow for expansion into other products and categories. Currently, around 14% of revenue comes from tea. The platform seamlessly connects specialist suppliers and international demand. This business model can be scaled up to cover products such as olive oil, snacks, or other speciality products. 

References: 

(1) Panhuysen, S. and Pierrot, J. (2018). Coffee Barometer 2018.)

(2) Adroit Market research (2019). Global Specialty Coffee Market Size by Grade (80-84.99, 85-89.99, 90-100) by Application (Home, Commercial) by Region and Forecast 2019 to 2025.) 

(3) International Coffee Organization (2020, April). World coffee consumption

(4) Euromonitor (2020, December). Passport: Coffee in Japan

(5) https://www.cuisinart.jp/sp/fcc_slurp/

Issuer key figures (actual and forecast)

All figures are rounded to the nearest thousand and presented in thousands of euros.

Further explanations regarding the financial figures

The financial figures for 2019-2021 in the table above are based on audited figures and rounded to the nearest thousand euros. Slurp's financial period is 12 months, from January to December. The 2022 figures are still open in the accounts and the financial statement is being prepared. Oy Slurp Ab plans to capitalize an amount of  EUR 180 000, which will have a positive impact on their equity. The profit & loss and balance sheet do not match due to this.

Slurp's revenue for the fiscal year 2022 was €1.05 million, and its EBITDA was €-266 thousand. The corresponding figures for the fiscal year 2021 were €1.14 million and €-862 thousand. In 2022, 70% of revenue was recurring, compared to 65% in the previous year.   

Until the exceptional year of 2022, when coffee prices on the world market started to rise sharply, Slurp grew by more than 550% in six years. Slurp expects to resume its growth trajectory in 2023. Despite the reduced profit, Slurp significantly improved EBITDA from €862 thousand in 2021 to €266 thousand in 2022. Reduced personnel costs mainly explain the increased profitability.  

Slurp has optimised its business during 2022, resulting in a decrease in personnel costs from €704 thousand (2021) to €457 thousand (2022) and a corresponding reduction in other operating expenses from €297 thousand to €204 thousand. Slurp expects the optimisation programme to be fully reflected in the income statement in 2023. Staff costs include contractor costs, e.g., purchased services related to business development. Other operating expenses include voluntary personnel costs and office expenses. The cost of materials and services (COGS) decreased from €805 thousand in 2021 to €674 thousand in 2022.  

The world market price of coffee started to rise sharply in the first half of 2021 and grew by more than 100% during the year. The price increase significantly impacted the price and demand for basic coffees, but also for premium coffees. As a result, the collapse harmed Slurp's growth prospects in 2022.    

At the end of 2022, the world coffee price started to fall. Slurp forecasts that the price decline will significantly impact its revenue and profit for 2023-2024.    

Forecast

Slurp, with its Board of Directors, has prepared financial forecasts based on an analysis of the market development and the company's growth potential. According to the estimates, Slurp can achieve a revenue of more than €5 million and a positive result by 2025.  

The underlying assumptions are based on the development and prospects in early 2023. As a result, Slurp expects revenue to increase to €1.58 million in 2023, €3.79 million in 2024 and €6.83 million in 2025.  

Slurp expects EBITDA to turn positive in 2023 thanks to revenue growth and cost efficiency, with EBITDA forecast at 107 thousand. For 2024, Slurp forecasts an EBITDA of €518 thousand. For 2025, respectively, an EBITDA of €1.18 million. For 2026, Slurp forecasts revenue of €9,91 million and an operating margin of €1.72 million. These figures correspond to a 50% increase in revenue for 2023 and an average annual growth rate of 88.3% over the next three years.  

Slurp sees capital-intensive internationalisation as the driver of revenue growth, enabled by 1) the company's scalable platform technology and the product range it enables, 2) a "soft launch" strategy to prepare and open new markets, and 3) proprietary technology and its exploitation potential.   

Growth will also be supported by increasing demand for premium coffees in developed and emerging markets. In addition, the removal of corona restrictions in key markets and the normalisation of coffee's market price have boosted demand, particularly in the B2B sector. As a result, Slurp expects good demand for its products and services to continue in the current year.    

Slurp can also seek growth by expanding into new product categories, a relatively simple step thanks to an automated system. Slurp is also preparing to collaborate with major smart device manufacturers, which could open a new source of revenue and create visibility for Slurp. The benefits of this potentially massive visibility include increased revenue, new collaborative projects, better brand recognition and improved customer acquisition efficiency (lower CAC).  

The LTV/CAC ratio is a measure that compares the lifetime value (LTV) of a customer against the cost of acquiring a new customer (CAC). Slurp's LTV/CAC ratio is around 9.3x (B2C) and approximately 5.6x (B2B). In other words, the LTV is 9.3 times and 5.6 times higher than the acquisition cost of a new customer. Anything above 3x is generally considered good, so these figures are exceptional.  

 After the business optimisation completed in 2022, Slurp expects a further significant reduction in staff costs from €457k in 2022 to €288k in 2023. In addition, the company plans to reduce other operating expenses (Opex) from €204k in 2022 to €195k in 2023. Other operating expenses include voluntary personnel costs and office expenses. Personnel costs are estimated at 18.2% of revenue in 2023 (43.4% in 2022). Personnel costs are forecast to decrease further as a proportion of revenue from 2024 onwards, reaching 11.85% of revenue in 2024 and 9.5% in 2025.   

To support growth, Slurp plans to recruit additional staff during 2023, which is estimated to increase the number of employees by two. With this growth, the number of employees is expected to increase by a further three in 2024 and five in 2025. For 2026, the company forecasts a headcount of 35.  

Slurp forecasts material and service costs to be around 64% of revenue from 2023 onwards as the market price of coffee normalises. The company also expects to benefit from economies of scale and automation, which will impact material and service costs. Gross profit is forecast to be 37.29% of revenue in 2023 and to fall below 37% from 2024 onwards on strong revenue growth.  

So far, Slurp has raised a total of €3,674,293.70 in funding, of which: 

• €2,039,734 is private equities 
• €584,559.70 is equity funding from a share issue on Invesdor in 2021 
• €700,000 in project grants from Business Finland  
• €353 000 in R&D grants from Business Finland 

Growth scenarios

Slurp focuses intensely on internationalisation in its growth strategy. If it takes off more slowly or more quickly than anticipated, this will significantly impact Slurp's profitability in the short term.

Low growth scenario  

Slurp predicts that internationalisation will take off slower than expected in the low growth scenario. This will hurt the company's revenue and EBITDA in the short term. In addition, the slower-than-expected growth will also hurt the company's investments, which may impact the company's growth and profitability in the medium term.   

In this scenario, Slurp forecasts 2023 revenues of €1,42 M€ (difference compared to the baseline growth plan - €158 thousand) and EBITDA of €98 368 (difference - €8,708). For 2024, Slurp forecasts revenue of €2.70 million (difference - €1.09 million) and EBITDA of €244,828 (difference - €273 thousand). For 2025, Slurp forecasts revenue of €4.60 million (difference €-2.23 million) and an EBITDA of €437 thousand (difference €-745 thousand), and for 2026, revenue of €6.67 million (difference €-3.24 million) and an EBITDA of €682 thousand (difference €-1.037 million).   

See Annex: Financial Growth scenarios  

High growth scenario  

In the high growth scenario, Slurp predicts that internationalisation will take off faster than anticipated, which will positively impact both the company's revenue and EBITDA in the short term. In addition, the faster-than-expected growth will also positively impact the company's investments. In the short term, growing investments will negatively affect profitability but have a positive impact in the medium term.  

In the high growth scenario, Slurp forecasts revenue of €1.74 M in 2023 (difference compared to the baseline +158 thousand) and EBITDA of €164 thousand (difference +57 thousand). For 2024, Slurp forecasts revenue of €4.35 M (difference +553 thousand) and an EBITDA of €507 thousand (- €10,474). EBITDA is projected to be worse than the baseline scenario in the short term due to higher service, material, and personnel costs as revenue increases. For 2025, Slurp forecasts revenue of €8.26 M (+€1.43 M) and EBITDA of €1.48 M (+ 305 thousand), and for 2026 €11.98 M (+€2.076 M) and EBITDA of €2.26 M (+ 548 thousand).  

See Annex: Financial Growth scenarios

Existing loans

Raised on 6 September 2018, Slurp has a loan from Nordea Bank with a principal amount of €43,943.50, an interest rate of 6,31% and a maturity of 60 months. Finnvera guarantees this loan. Slurp also has a loan from Nordea Bank, raised on 3 June 2020, with a principal amount of €49,994.00, an interest rate of 4,55 %, and a maturity of 35 months. Finnvera guarantees this loan. In addition, on 17 April 2020, Slurp took out a loan from the State Treasury with a principal amount of €353,000.00, an interest rate of 1% and a maturity of 84 months. The first three years of the Finnvera loan are repayment-free.   

On 15 December 2022, Slurp had outstanding loans totalling €438,016.58, of which €417,520.83 is principal and €20,495.75 is unpaid interest. Over the next 12 months, €57,855.66, of which €49,182.10 is principal and €8,673.56 is interest. Over the next 24 months, €110,115.92, of which €103,588.73 is principal and €6,527.19 is interest.  

Please see these figures in the previous table under "Total loans".  

Slurp's cash and cash equivalents amounted to approximately €135,000 at 17.01.2023  

Slurp's pre-money valuation is €4,898,136.00, corresponding to a price of €10.16 per share. This valuation reflects the understanding of the Board of Directors and the majority shareholders of Slurp of the fair value in the current market environment. The company's majority shareholders include Innovestor Growth Fund II Ky. The current valuation of €4.90 million corresponds to a 4.64x revenue multiple based on 2022 figures and 3.10x based on 2023 figures.   

Slurp's forward valuation multiples are 1.29x revenue and 9.45x EBITDA for 2024 and 0.72x revenue and 4.14x EBITDA for 2025, with 2026 multiples of 0.49x revenue and 2.85x EBITDA.  

In the last crowdfunding round in 2021, Slurp's pre-money valuation was €7,173,638.48, corresponding to a price per share of €162.83. Slurp raised €584,559.70 with a pre-money value of €7,173,638.48 (€7,778,198.18 post-money), corresponding to a price per share of €162.83 (16.28).   

Since the last funding round, Slurp has carried out a 1/10 share split, whereby nine new shares were issued for every old share. Valuations of growth companies have fallen by around 40-60% due to the changed business environment. Therefore, Slurp's Board and majority shareholders agree that a reduction in Slurp's valuation is justified despite the progress of the business.  

The valuation is based on the following elements:  

1.Exceptional margins:  

Slurp has excellent margins, typical of the premium segment, which results in superior profitability on both the B2B and B2C sides. Slurp's average gross margin is 33,8 %.   

2.Capital efficiency:  

Slurp's negative operating capital and strong network effect (new suppliers attract new buyers to the platform and vice versa) allow for capital-efficient scalability. In short, negative operating capital means that Slurp's customers pay for their orders up front, while Slurp's suppliers invoice Slurp only after the order has been shipped. This drop-shipping enables a business model in which Slurp has no own stock and, therefore, no risk of inventory depreciation or obsolescence.  

3.Fast and capital-efficient scaling: 

Slurp's scalable platform technology, "soft launch" strategy and proprietary technology enable fast and capital-efficient scaling internationally. Thanks to its automated system, Slurp can also expand into other product categories internationally. In addition, Slurp is preparing to partner with major smart device manufacturers, which could open a new revenue stream and create visibility for Slurp. These potentially massive visibility benefits include increased revenues, opportunities for more collaborative projects, better brand recognition and improved customer acquisition costs (lower CAC).  

4.Excellent customer retention and high customer lifetime value relative to acquisition costs:  

On average, Slurp's B2B and B2C customer retention is 97%, giving Slurp an excellent LTV/CAC ratio. LTV/CAC measures a customer's lifetime value (LTV) in relation to the cost of acquiring a new customer (CAC). Slurp's LTV / CAC is 9.3x on the B2C side and 5.6x on the B2B side, which can be considered excellent figures.  

Various risk factors associated with investing in the company may be significant if realised. Many of the company's risk factors are part of the nature of its business and are typical for the industry. Each risk may have an essential effect on the company's business, profits, and the potential ability to achieve its financial objectives. The risks presented are not ranked in order of importance, and the order in which they are presented does not reflect the likelihood of their occurrence.   

Risks related to the share issue and the company's shares   

• Various risk factors and circumstances may lead to a fall in the market price of a share, which may result in a partial or total loss of the invested capital.    

• There may be no return on the investment at all.     

• The company's shares are not publicly or multilaterally traded on any marketplace, so there is no active or liquid secondary market for the shares. There is a risk that the security may not be sold at the desired time or at all, or that the price offered may be lower than its subscription price or its actual value.     

• The transferability of shares is limited by the redemption and consent clauses in the Articles of Association and the obligation to enter into a shareholders' agreement.    

Macroeconomic risks     

• Uncertainty in the company's core markets, the global economy and financial markets may adversely affect the company's business and operating results.   

Risks related to the company's business   

• An overly aggressive internationalisation strategy can slow down the company's growth. Carrying out several soft launches simultaneously can expose the company to a higher level of risk, as it may lack the financial resources needed to enter the market. This can make it more challenging to reach the target market and damage the brand image in the long term. It will also reduce the company's chances of successfully connecting with the market in the future. Rushing into internationalisation may also lead to inadequate market research and analysis, with the company allocating resources to projects based on inaccurate analysis. International expansion may also lead to ignoring existing markets. 
   

• Understanding the cultural differences that affect consumers in speciality coffee markets is essential to adapt marketing processes to these markets. However, over-adaptation of these practices can cause problems that affect the company's scalability and, thus, efficiency when entering new markets.  

• If the company tries to adopt new product categories too quickly in a market where its brand is not well known, the effectiveness of customer acquisition is likely to suffer. In this case, the company will not be able to increase market share fast enough to become profitable. As with internationalisation, rushing this process may lead to erroneous conclusions about the demand for certain product categories within the company's existing customer base. Understanding a new product category and its consumers requires significant market research. Suppose the company introduces too many different product categories too quickly. In that case, there may also be a risk of administrative problems that can negatively impact the customer experience and undermine both new and existing product categories. 

• Failure in marketing may adversely affect the company's customer relationships and service demand.      

• The company may be unable to implement its expansion strategy and take full or timely advantage of new business opportunities.      

• The company may raise less capital than planned. This may result in the company not being able to successfully implement its business activities due to a lack of funds.     

• If the company's business idea does not assert itself on the market or if the planned business development cannot be implemented as hoped, there is a risk of the company becoming insolvent.     

• If the company is unable to compete effectively with existing and potential new competitors or to respond to changes in the competitive environment, it may adversely affect its turnover, profitability, and customer loyalty. Competition may become significantly more intense if competitors with more capital enter the market.     

• There is a risk that the company will get negative media attention. This may lead to significant sales decline and losses for the company because there is insufficient demand for the company's services because of the negative media attention.     

• Various other factors, in particular changes in the economic situation combined with planning errors, environmental risks, dependence on key personnel and changes in the legal and fiscal framework, can adversely affect the business.     

• The demand for the company's services and, thus, its business performance is affected by, among other things, the general global market situation, the competitive position, and technological developments. Therefore, the company and its business are exposed to market risks independent of the company's actions.     

Risks related to management and staff    

• The company is dependent on its management and qualified personnel, and the loss of such personnel could be detrimental to the business.      

• Failure to recruit and retain qualified personnel may adversely affect the company's business performance.      

• Increasing the number of staff may harm the company's profitability.      

Legal and regulatory risks      

• Failure to comply with laws, regulations and general social responsibility relating to the company's activities and products may result in sanctions and damage the company's image with its customer groups.      

• The company has no pending lawsuits or other open litigation, but as the company's operations expand, legal risks become more significant.     

• The company may be subject to claims or lawsuits that could harm the company and require management resources.     

• The company's legal regulatory environment may change, potentially making it more challenging to conduct business.     

Financial risks      

• Fluctuations in foreign exchange rates may harm the company's operations.      

• The company is exposed to changes in interest rates on loans.      

• The company is exposed to credit and counterparty risks.      

• The company's financial projections are subject to risks, as forward-looking estimates, targets, and other statements always involve uncertainty, and they are only predictions, not guarantees of the future.    

The risks listed above are not the only factors affecting the company's operations. Also, other risks and uncertainty factors that the company currently does not identify or considers presently irrelevant may have an integral effect on the business operations, business results, and financial standing of the company.   

Investment related documents

Update 30.1.2022

Prolongation of the funding round

The Board of Directors decided to prolong the subscription period until February 5th 2023.

Update 25.1.2023

The 2022 figures are still open in the accounts and the financial statement is being prepared. Oy Slurp Ab plans to capitalize an amount of  EUR 180 000, which will have a positive impact on their equity. The profit & loss and balance sheet do not match due to this.