LetsBuyIt.com, the Swedish online retailer which bounced back from the brink of bankruptcy, has secured a further round of EURO4 million and expects profitability before the end of 2002 under its new business model. Strategic investor, Global Emerging Markets New York has committed the capital which is being paid in four equal tranches. The first tranche was paid on October 31. The next tranche will be drawn down upon listing of the shares on the Neuer Markt segment of the Frankfurt stock exchange. The remaining tranches will then be paid at monthly intervals.
Following a restructuring of the company, LetsBuyIt.com is focusing entirely on its agency programme. Under this programme, retailers and manufacturers use the company as their online shop, benefiting from an advanced technology platform and a 1.3 million member base across Europe. Agency partners are responsible for taking payment and fulfilling the order, while LetsBuyIt.com receives a commission payment for each product sold.
By tightening its model, the company has been able to substantially reduce its operating costs, cutting its headcount by over 50 per cent and focusing operations in Sweden, Germany and the UK.
The company was saved from bankruptcy earlier this year thanks to the successful closure of a EURO4 million financing round from both existing and new investors see evcj February page 35.
LetsBuyIt.com recently won a judgement against London-based venture capital firm Schmulik Stein International which had refused to pay out funds committed to the company. SSI was ordered to pay EURO7.5 million.