Good afternoon, Fabian. Congratulations again on your growth financing in May 2022. With your 20,000+ issuing points and reusable cups and bowls that can be washed around 1,000 times each, you have helped shape the German market ecologically and taken it to the next level. When and how did the idea of founding RECUP originate?
The idea to found RECUP was formed during my university time in Sweden in 2015. At that time, I was drinking coffee from disposable cups every day and was assigned a university project. That gave me the idea of developing a reusable deposit system for coffee cups. My Co-Founder, Florian, had exactly the same idea at the same time, but at a different university. Fortunately, we were introduced to each other by a committed politician. This resulted in the idea for RECUP, with the aim of eliminating 2.8 billion disposable cups at that time. In the meantime, we are now saving a total of 13 billion disposable packages.
What were the driving forces behind the decision to start seeking growth financing?
The change in the political environment in Germany and Europe was decisive. The majority of restaurants and coffee shops in Germany were obliged to offer a reusable packaging solution. And it was clear that the whole market would somehow go crazy at that moment, and everyone would try to gain as much market share as possible. We would not have been able to do this on our own and therefore needed partners who could bring more than just cash on board.
Basically, you can say that it took some time for the market to develop at all. But we are also very happy that there was such strong competition. Without competition, as we have noticed ourselves, you come to a stagnation or standstill in terms of development after two or three years and leave your product as it is. And then you only realize afterwards that there is still a lot of potential to be tapped. And I think it was highly valuable for making our products and the RECUP platform even more sustainable. Today we have reached the point where we are slowly realizing that we are moving from the market phase of innovation to the displacement of some market players since the market has turned quite fierce.
RECUP has experienced steady growth since its founding in 2016. To what extent have the set growth targets been achieved after the growth financing, and what were the challenges along the way?
In fact, we have always grown strongly since our foundation, taking a closer look at the overall market and the competition.
I believe that three points, among others, should be mentioned here to underline this growth once again:
1) The change in the law on mandatory reusable packaging did not take effect as quickly as we had expected. The discrepancy between theory and reality when introducing new laws seems to involve a certain amount of goodwill over time. Now that we have experienced this, we have received confirmation of this from all sides.
2) A very large proportion of our partners are restaurants and coffee shops. It is precisely this customer group that has suffered greatly during the Covid-19 pandemic – unfortunately, numerous of them have gone insolvent.
3) The last two years have also been characterized by wars, the energy crisis and inflation. Most recently, VAT was increased at the beginning of 2024, rising from 7% to 19% for our primary customer group. Our partners also notice these additional burdens when they evaluate their profitability and eventually try to optimize it.
All in all, we are taking a step forward every day, connecting more partners/ issuing points and connecting them to our RECUP platform.
Why did you choose ox8 Corporate Finance as your M&A/ Corporate Finance advisor? How do you assess the cooperation?
This is relatively easy to answer: We thought of you as the most competent and pleasant advisor.
We looked at various advisors and asked ourselves who would be the best fit for us. We wanted to have the feeling that we could go through thick and thin with them. And that is exactly what we did together. ox8 and RECUP found a very collaborative way of working even in very challenging situations. I have incredibly positive memories of that time. You were very solution-oriented and innovative at all times. It was the right decision because on a personal level it was simply a good fit and harmonized well. I am more than satisfied with the work of ox8.
What motivated you to choose certain investors and what criteria were particularly important in the selection process? What would you recommend to other founders regarding growth funding?
We were careful not to select any fixed-term funds. Our core idea was that we wanted to have the flexibility to grow together with the shareholders in a sustainable manner and to decide where the journey would take us. We did not want to bring an investor on board who was purely exit-driven and would therefore do RECUP more harm than good.
I always recommend that other founders communicate their strategies transparently with their co-partners. It is very helpful for everyone involved to know what goals they are working towards together.
Shortly after the new partners joined, you carried out your first M&A transaction by merging with your main supplier Crafting Future. What was the reasoning behind this step?
Right – shortly after the new partners joined, we carried out our first own M&A transaction by joining forces with our main supplier Crafting Future. Crafting Future was not only a supplier, but also offered very beneficial synergy effects in purchasing. In addition, Crafting Future was the only innovative company working on the product in the market and had a strong focus on reusable packaging, material, etc. We wanted to integrate this know-how into our company.
Another decisive factor in this decision was our long-standing partnership with the founders of Crafting Future, who we brought on board with RECUP as part of the transaction. Can Lewandowski, founder, and Managing Director of Crafting Future, has joined RECUP as an additional Managing Director.
What are RECUP’s long-term plans and visions? Are there specific goals or milestones that you would like to achieve in the coming years?
Our long-term vision is to build a sustainable and circular ecosystem for a world without single-use packaging. Our next concrete goals focus on further expanding the German market and strengthening our market leadership. There are more than 100,000 distribution points in Germany, and we expect that eventually only one or two major players will dominate the market. RECUP aims to be one of these leading players. In addition, we are planning greater internationalization, which has already begun with the RECUP launch in Austria.
