Movinga raises $26 million US after restructuring
20 Oct 2017
Movinga, the German relocation platform backed by Rocket Internet, raised €22 million ($26 million U.S.) in a funding round, reported Gruenderszene this week (in German). Company management claims the restructuring is on track and that it expects to generate revenue of €20 million ($23 million U.S.) in FY2017.
Santo Venture Capital, a new investor, led the round that also included previous backers Rocket Internet and Earlybird. Santo funded €9 million up-front, and Rocket and Earlybird together chipped in €4.4 million. As part of the deal, Santo promised Movinga an additional €9 million by early 2018, on condition the company achieves certain milestones.
Movinga launched in Germany in 2015 and expanded rapidly. A year later, it started imploding. In June 2016, the founders quit amid a legal scandal, and the company retrenched a quarter of its staff as it pulled out of some markets.
In December 2016, it also lost a large portion of its leads from real estate site ImmobilienScout24 (IS24) to main competitor Move24.de. There were rumors in the German press of a potential merger between Movinga and Move24.de.
But the new management team, led by Finn Age Hänsel, ex-MD of Rocket Internet in
Australia, claims it has improved the financial situation of the company considerably. Hänsel told Gruenderszene that Movinga now earns a profit of €187 per move as opposed to €5 just one year ago. It has also extended its marketing strategy, so that it’s less reliant on leads from IS24, he said, and claimed that Movinga should reach operative breakeven by early next year.
In future, Hänsel said Movinga plans to concentrate also on in-city relocations and will consider expansion to Scandinavia or Benelux. He also told TechCrunch he’s looking at adding services, such as utility hookups, and wants to further digitize the moving process.
At the NOAH conference in December 2016, Hänsel forecasted FY2017 annual revenue of at least €60 million, and clearly, Movinga is nowhere close. Yet, investors appear confident enough in its future to keep it going.