EcoOnline: From Norwegian software company to European leader

Erik Hagen and Jostein Vik

November 2021: Seven years ago, Viking Venture invested in a small Norwegian software company called EcoOnline. Today, the company is an European leader in its field and listed on Euronext Growth in Oslo.

Since Viking Venture invested in EcoOnline in 2014 the company has increased its annual recurring revenue (ARR) by 10x from NOK 40 million to NOK 408 million, through nine acquisitions and an impressive 29% yearly organic growth. In the same time period, enterprise value grew by a factor of more than 100 from NOK 32 million to NOK 3 450 million.

Viking Venture and EcoOnline’s exciting growth journey:

2014 – Viking Venture acquires 64% of EcoOnline by investing NOK 24 million.

2017 – Summa Equity acquires EcoOnline while Viking Venture reinvests a substantial share of proceeds.

2020 – EcoOnline is recapitalized, adding Goldman Sachs’ Merchant Banking Division and Summa Equity’s Fund II as new owners. Viking Venture reinvests again.

March 2021 – EcoOnline is listed on Euronext Growth in Oslo which attracts leading international investors and new growth capital for the company. This marks an exciting new chapter in the company’s growth journey. Viking Venture remains as shareholder.

November 2021 – Viking Venture sells its remaining stake in EcoOnline.

– We are very proud of what we have accomplished together with EcoOnline during the last seven years of ownership. We look for business-to-business (B2B) software companies which support business critical work processes for their customers – and EcoOnline ticks all the boxes in our investment strategy. We have helped to build a fantastic organization with a very competent management team, great products and happy customers, says Erik Fjellvær Hagen, Managing Partner at Viking Venture.

– EcoOnline is a super company, with great products and great people. During our ownership time the company has developed into the European leader within HSEQ (Health, Safety, Environment and Quality) software. The decision to do a full exit was made with ambivalence, but we have gradually reduced our stake in EcoOnline and it was time to step down from the board and sell our remaining shares as part of rebalancing our portfolio, says Jostein Vik, Partner at Viking Venture.

Read about the fantastic growth journey with EcoOnline in this interview with Erik Fjellvær Hagen and Jostein Vik. It was carried out when EcoOnline was listed in March 2021 and highlights some of the key factors for Viking Venture’s success with EcoOnline.

Viking Venture + EcoOnline = Success

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?

  1. 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.
  2. 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.
  3. 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.:

  1. Built a scalable sales engine, taking EcoOnline’s organic ARR growth from 5% at investment to a CAGR of 29% since 2014
  2. Built a great scalable model customer success, increasing the contribution from upsell
  3. Acquired 9 companies from 2014 to date
  4. ARR has increased with 10x from 2014 to 2021
  5. Increased prices to reflect customer value
Header image: Erik Fjellvær Hagen & Jostein Vik, respectively Managing Partner and Partner at Viking Venture