From NOK 38 Million to NOK 3,850 million in six years
March 24, 2021 was a special day for the hard-working team of the fast growing software company EcoOnline. The company was successfully listed on Oslo Stock Exchange. A major milestone in an exciting journey that was fully ignited when Viking Venture invested in the company back in 2014.
Since Viking Venture invested in EcoOnline, the company has increased its annual recurring revenue (ARR) from NOK 60 million to more than NOK 317 million, the number of employees is now 390 and the value has increased 100x from NOK 38 million to NOK 3,850 million. EcoOnline is without a doubt a great company, with great products and with great people – and it even saves lives. Picture: Jostein Vik (left) and Göran Lindö, CEO of EcoOnline.
We have had a chat about this success story with Erik Hagen and Jostein Vik, respectively Managing Partner, and Partner at Viking Venture. They have both spent numerous hours with the company and been members of the board since 2014.
Viking Venture was EcoOnline’s first institutional investor and came in as owners in 2014. What was it about EcoOnline that got us interested?
EcoOnline hit our sweet spot in terms of our investment strategy. We look for business-to-business (B2B) software companies that support their customers’ business critical work processes. We quickly understood that EcoOnline had innovative and in-demand products, the customers were super happy and churn was non-existent. In addition to this, the company was well positioned in the Norwegian market and had a great team.
What was the vision back then with the company and what are our aspirations now?
At first our ambition was to conquer the Nordics with the solution for chemical management. Over the years, EcoOnline has gone from being a Nordic chemical management system to a state-of-the-art cloud-based software solution for chemical and HSEQ (health, security, environment, quality) management. The goal now is to be the leading provider in Europe.
Has there been any big challenges or insights with the company?
- One challenge we come across very often is that companies rarely understand that the value they provide through their products/services exceeds what they charge customers. Our experience is that B2B software companies rarely are priced at levels that actually reflect how much value they provide – the price is usually (far) too low, and this is something we almost always start to work on immediately with new portfolio companies, EcoOnline included.
- In terms of insights, we particularly noted the extra drive and motivation we see among employees when a company has a clear and constructive purpose. People are willing to work hard for a company that saves lives.
- Purpose combined with a strong management team and competent employees, top notch products, and owners with deep sector expertise within B2B software (like Viking Venture) have been critical factors for EcoOnline’s success.
What has surprised you the most about the journey with EcoOnline?
I honestly couldn’t imagine how fast we would be able to develop the company and create this much value. While we have put in a ton of hard work together with the company, we have also been lucky with our timing. The Nordics is likely the most advanced region when it comes to management of chemicals and HSEQ, and the European market is still really fragmented. We have taken EcoOnline from being a well-established name for chemical management software in the Nordics to a comprehensive EHS solutions vendor to the broader European market. EcoOnline now has leading positions in all the Nordic countries as well as in the UK and Ireland, offering their industry-agnostic solutions to more than 6,500 customers across 86 different industries.
Speaking about hard work, what are the most important steps we have done with EcoOnline in the last six years?
EcoOnline hit our sweet spot when it comes to our investment strategy and how we work together with our portfolio companies. When we invest in a company, we look at its position today, but more importantly, we look at its potential for growth and what it could become. We help Nordic software companies scale by using our in-depth domain expertise combined with our extensive community of software companies and in-house executive talent recruiters.
With EcoOnline we have had the chance to pull all the levers in our playbook, we e.g.:
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Increased prices by an average of 25%+
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Built a scalable sales engine, taking EcoOnline’s organic ARR growth from 5% at investment to more than 30% in 2020
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Built a great scalable model customer success, increasing the contribution from upsell
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Acquired 7 companies from 2014 to date
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ARR has increased with 3x from 2017 to 2020
What’s next?
Our next ambition is to become the clear market leader in Europe through rapid organic and inorganic growth. And who knows, there might be some exciting things to do across the pond as well…
Top picture: EcoOnline’s employees attending the bell ceremony at Oslo Børs, online due to Covid-19