June 28, 2022

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The high pressure washer entrepreneur has captured half of the market, but is now starting to really notice the turmoil: - We struggle for predictability

The high pressure washer entrepreneur has captured half of the market, but is now starting to really notice the turmoil: – We struggle for predictability

From Askøy outside Bergen, Norwegian company Ava developed the high pressure washer that is now sold in 25 countries.

After just six or seven years in operation, Ava is challenging the world famous brands and has gone from zero to NOK 138 million in turnover last year. This was about 60 percent growth compared to 2020.

We have seen opportunities in a market that is stagnating in development. Ava has made tangible innovations, and we’ve worked to stand out, says Morten Torlei (49).

In both Norway and foreign merchants, the brand has up to 50 percent of the market share, he says. High pressure washers have been given a central place in the catalog of the German giant chain Bauhaus, and as recently as this week there were inquiries this week from big chains wanting to take on the contender.

The Torlei family has run a shop for high pressure washers in Bergen for many years. Growing up, there were high pressure washers being talked about around the kitchen table. In adulthood, Morten Turley began designing his own models.

The company was valued at NOK 305 million after a capital increase in the new year. At that time, 40 million growing capital has been collected In an increasingly tight investor market.

turn turtle

Norway’s Ava is now really starting to notice the market turmoil. In just a few months, the entire math is turned upside down, even though the company has put itself in the saddle to be upfront.

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Costs have increased dramatically, and the entire margin has decreased. We must work to cover the increased costs, says the entrepreneur.

With production in Shanghai and around the world as a market, Ava is particularly vulnerable to global vagaries. The company tried to secure itself ahead of this year’s season through a price adjustment that should be taken into consideration

– Before this year’s season, we have increased prices so that we are ready to increase the cost by 15 percent. We thought it would last, but the cost increase was huge.

Torlei believes that major volatility has taken its toll on a startup.

– The year this year was completely different. We’ve weathered the pandemic and dealt with problems on an ongoing basis, but we struggle with predictability. He says it is particularly difficult for start-up companies.

Ava Norway It is one of about 200 companies participating in DN’s Entrepreneur Survey This year’s creators.

emergency brake

Retail business in many countries is now experiencing the emergency brake, which has now also affected online commerce.

The so-called do-it-yourself market is among the hardest hit.

Many Norwegian traders struggle hard with the fall. Turley says many retail workers are suffering from the stalls of the boom.

On the other hand, Ava achieved 20 percent growth in the first five months of the year. Torlei is very happy with that.

Internationally, there is a significant drop of 20 percent among merchants in our categories. So, 20 percent is insanely good.

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The founder believes that sharp market volatility can open up new opportunities.

When something doesn’t work and circumstances change, one of our strengths is that we change quickly.

Express transportation costs are part of the picture. The price of a container from Shanghai to Europe increased from 20,000 to 120,000 kroner.

In addition, there is a significant increase in restricted capital when production time increases and shipment increases from 34 to 87 days.

We made more washing machines stock this spring than we’d have.

Factories in Shanghai were closed for 2.5 months.

Now exports from China are dropping dramatically, and Turley hopes the container crisis will pass.

15 to 35 employees

Over the past year, Ava has gone from 15 to 35 employees.

– In May last year, we decided to be ready when relief came. We have traveled to potential clients and visited trade fairs to show off. Turley says the goal is to get bigger market shares.

The growth plan contributed to the company losing 13 million Norwegian kroner last year, but this is temporary, according to the entrepreneur.

– He will turn around this year and we will balance the score this year. We won’t continue to burn money, Turley says.

On the owner’s side, there have been investors such as Trygge founder barnehager Sigurd Aase and angel investors Dag Skansen and Momentum.

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The Torlei family still controls more than 50 percent of the shares.

Amazon promotion

New Zealand and Australia are among the countries to which Ava is exported.

In England and Germany, Ava has also used Amazon as a sales channel. According to Torlei, an e-commerce platform is not an easy path to success as one might get an impression.

It’s a lot of hard work, and we haven’t found a magic formula. We spent time figuring out algorithms and placements. Our priority is sellers, so we are not aggressive in digital markets.

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