In the old days, there used to be ONE marketplace for everything. Do you recall the fairs where people gathered one time per week or even month? Where there was a corner for food vendors, another for small electronics, some even came due to the big community of potential buyers for their cars?
Nowadays, we have ONE marketplace for apartments, but then another for used cars or phones, and many others that bridge service providers with the right prospects. Marketplace startups are springing like summer tomatoes.
The growth of the marketplace business model
The online marketplace sector in Southeast Europe has been on a fruitful developmental stage in the past couple of years. The pandemic, the digitalization of traditional verticals, the soar in mobility solutions, and the scalability possibilities are a few of the surging growth factors that have made this business model a dominant one.
In 2021, there were over 500M e-Commerce users in Europe. Prospects’ numbers will rise as online experiences are quicker than physical ones. Remember when we used to receive an order in 1-2 weeks instead of 3-5 days or even 24h? Where there is shopping-from-the-comfort-of-the-couch demand, there will also be an offer.
Emulating Amazon’s legendary success, savvy business men and women will continue to build new tech startups. So, from where we stand, the future of marketplaces in SEE looks quite competitive. But what does it take to develop a scalable brand that will attract the attention of angel investors and VCs?
How do you build marketplace startups?
Most startup founders launch a tech solution based on their needs. Be it cars and phones, or services and classes, they were the initial customers of their products. But there is more.
#1 Work with experts in the field
The CEO of Greek-based Spotawheel shared with us in a previous interview that the issues in the second-hand car market presented the right opportunity for him to develop the business model. He imparted that since he lacked experience in the field, he onboarded experts to build the solution, which recently raised €120M in funding.
“Our model aims at cross-border trading, finding the best cars in Europe, and getting them to the first countries. The problem with this trading before was that small dealers were buying low and selling high. The more they hid, the more they made. So, we aim to be fully transparent.”
Charis Arvanitis
Co-founder and CEO of Spotawheel
#2 Research and perfect the solution
Romanian-founded edtech marketplace She is MOM is offering a platform for female users to find the right programs, mentors, and jobs to develop their careers.
Andreea Radu, one of the five co-founders, shared with us what their secret has been:
"To be able to read, you must first learn the alphabet. First of all, you have to change your mindset, and you have to start from scratch and have patience, listen, and understand the new field you are entering."
Andreea Radu
Co-founder of She is MOM
#3 Build a solution inspired by your needs
The sustainability sector has been a great bolster for the marketplace business model. Circular economy startup Flip, which offers an online platform for refurbished phones, has raised over €8M in funding to scale its solution in Europe.
George Moroianu, the tech startup’s CEO, told The Recursive that he, along with the founders above, was also inspired by personal experiences: “Building the initial product was quite intuitive because we did it to solve our own needs.”
#4 Tap into unexplored markets
The beauty vertical has a few local players, but one that stands out is Stailer. The founder and CEO, Andrei Ursachi, tells The Recursive that to find their way in the market, they addressed B2C instead of B2B.
“From the first day at Stailer, it was all about market share. Consumers no longer desire to call for appointments. The smartphone is now the remote controller of our lives.”
Andrei Ursachi
Founder and CEO of Stailer
Their secret was to expand fast and offer consumers a wide variety of options to choose from. They promoted a freemium business model that charged saloons €1 per consumer. Now, saloons want to pay 35% more to welcome extra clients from the tech startup community.
#5 Get help tapping strong into a developing market
Alex Chatzieleftheriou, CEO and co-founder of PropTech Blueground, also joins with a solution based on his experience while traveling for work. The real estate tech startup offers a curated network of thousands of homes around the globe, which are available for stays of a month or longer.
“I was staying in hotels for months on end, never truly feeling at home or comfortable after a long day of work. I remember trying to rent an apartment, but it was impossible as apartments came unfurnished, landlords wanted to rent for a 1-year minimum and there was a ton of paperwork. We have clients that stay with us for years because they value the flexibility, quality, and consistency of the product.”
Alex Chatzieleftheriou
Co-founder and CEO of Blueground
He shares with us that based on their research, the rental market is set to have steady growth, at a compound annual growth rate (CAGR) of 5.2% from 2022 to 2030. There will be more people reaching the age to rent spaces, and more men and women will want to travel and still experience the comfort of the house abroad. With this solution, he is confident of also lowering the costs of similar business travelers like himself.
Launched in Greece, back in 2013, with the idea to tap into the market strongly, to be visible everywhere people look to rent an apartment, and also address the special needs of corporations like Apple and Google worldwide, wasn’t easy, he remembers.
“I met Greek entrepreneur Apostolos Apostolakis early in our journey and he quickly became our first investor. Apostolos and Venture Friends provided a lot of guidance in the early days as we were still learning the ropes.”
Why would VCs invest in marketplace startups?
George Dimopoulos, co-founder of Greek-based Venture Friends VC, shared with The Recursive that the model behind marketplace startups is in the VC’s DNA. The team supports tech startups like Blueground, Instashop, and Spotawheel, amongst many others.
They are looking for “stellar teams with global aspirations, building scalable marketplaces with early signs of strong product-market fit, and solid network effects,” he says.
George went as far as to pinpoint a startup that they are keeping an eye on, due to its solid growth during challenging times, and that is Ferryhopper. The travel tech company raised €5M to accelerate the digitalization of sea travel.
Explore a list of who’s who in the marketplace startups vertical in Southeast Europe – soon on www.therecursive.com.
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