Building a European e-commerce champion

Why did Kapten & Son decide to partner with a private equity fund?

Johannes Theobald: The three of us founded Kapten & Son as students with €10,000 in 2014 and until our deal with the Growth team at Ardian in 2021, that was the only equity investment that went into the company. Our firm’s first product was a watch that had exchangeable straps so our customers bought one watch but many watch straps. It was an instant success and the company grew extremely fast – in our first year we generated revenues of €9 million. From there we added other accessories like sunglasses, backpacks, jewellery and suitcases, always working with the best designers and aiming for excellent quality products. Our ambition from the beginning was to become a ‘love brand’ and that’s what we achieved thanks to our product and marketing strategy. Then, when Covid happened, we were still growing quickly with a very high share of direct-to-consumer (D2C) sales, but we felt we were entering a different world. We needed to be as professional on the financial side as were in product, marketing and operations, and for that we needed an investment partner to guide us as we scaled the company up.

Why did Ardian Growth want to invest in Kapten & Son?

Romain Chiudini: We have seen every kind of e-commerce company and we knew Kapten & Son had a state-of-the-art digital business model with a very strong team of founders and a deep understanding of what next-generation e-commerce companies will look like. Their success in building a powerful brand combined with the intelligence they bring to data analysis and marketing has made them a leading D2C player. But importantly, Kapten & Son was not begging for capital. This was a fast-growing and very profitable company, so the discussion was about how to grow the business and scale the internal organization to make Kapten not just a leading brand in Germany but across Europe.

RC: A successful partnership is always about the chemistry between the people and we had a great understanding from the beginning.

How are the company’s growth plans progressing?  

JT: Since Ardian invested the company has been transformed. We now have a much stronger financial reporting framework and a dashboard with a broader set of KPIs. We have also started making acquisitions to expand our range, using the expertise we have gained and the digital platform we built for Kapten & Son to support a larger group of brands.

JT: We invested in Hey Marly, which is an excellent fit with Kapten because it’s an up-and-coming footwear brand that makes customizable shoes. Also, we are incubating two very small companies that make sustainable products, Lieblingsglas which makes kitchen products made of glass and Greentastic, specialized in home accessories and bath & body products. Like Ardian, we believe sustainability is a must. Our progress so far is excellent: our international operations, especially France, the Netherlands and the UK, are now growing faster than our home market in Germany. We feel we are on the way to becoming a European D2C champion.

RC: We are really happy with the progress that the company is making. We are very confident that it can be a platform to support new businesses that we will acquire or incubate. Our aim is to add strong founding teams to the group and work with them to develop it.

RC: We have deep experience of online business models and a huge network of digital entrepreneurs that we draw on to help and support our portfolio companies. A big part of our proposition now is our proven ability to help Ardian Growth portfolio companies scale up in the US as well as expanding across Europe.

Has this investment partnership met your expectations?

RC: Definitely. You have to remember that the economy today looks very different to the situation in early 2021 when we were first discussing the strategy for Kapten & Son. We shared a strategic vision and a reading of the market for Kapten & Son then, but of course we are now working on ways to use this much more difficult context to make the business stronger. And compared to our competitors, we are performing very well, still achieving excellent growth with very nice profitability. It is great from our perspective that we can have really constructive discussions and adapt our thinking to an external context that is changing dramatically. That’s very important.

This is Ardian Growth’s first transaction in Germany, and we want to make many more equity investments in this market. We could not ask for a stronger start.

JT: I believe there is a big market for minority investors like the Growth team at Ardian. If you are entrepreneurs with 100% ownership of a profitable, growing company, you will always worry about letting somebody new in. But we had nothing to worry about with Ardian Growth team because they are real partners who are on your side.