Published on November 22nd, 2022 📆 | 7905 Views ⚑0
The Austrian start-up giving old technology a new beginning
“We want to be the Amazon of sustainability,” says Peter Windischhofer, founder of Austrian start-up Refurbed.
An online marketplace selling refurbished electronic goods, Refurbed has already grown rapidly since it was set up five years ago in Vienna. It has become one of Austria’s most successful young companies, and a European tech champion, employing more than 300 staff, operating in 12 markets, and generating “hundreds of millions” of euros of revenue, according to Windischhofer.
The proposition is simple: on Refurbed’s website, consumers can buy second-hand smartphones, laptops, and tablets that have been renovated so they look and perform like new.
The idea is not original but what Refurbed offers is the promise of reliability and quality — concerns which have previously deterred consumers from buying used electronics. Each item comes with a 30-day trial period, and a 12-month warranty. The company says it rigorously vets the merchants that use its site — professional refurbishers — and removes those who do not meet its standards. It incentivises high-quality work by giving higher margins to the merchants that consistently get the best ratings from customers.
And those customers get to buy devices such as iPhones and Microsoft laptops for a fraction of their retail price. Refurbed also pushes its ecological credentials hard: new smartphones are carbon-intensive to make and contain components that require rare earth minerals mined in often highly environmentally damaging circumstances.
“We fundamentally believe we have to change the way we consume as a society,” says Windischhofer. “Technology can be a major catalyst for that. And that’s why we built Refurbed. Because we believe that reusing products that are already there makes a lot of sense.”
The 33-year-old left consultancy firm McKinsey and founded Refurbed in 2017 with fellow Austrians Kilian Kaminski, former head of Amazon’s refurbished products programme in Germany, and Jürgen Riedl, a software engineer and entrepreneur.
The company has raised more than €60mn in equity financing so far, in two fundraising rounds. Its biggest market is German-speaking Europe, but it is also a leading platform in Denmark, Ireland and Sweden. Windischhofer says the site has now sold products to more than a million customers.
“For a company like us, Europe is great, because you have a popular mindset towards sustainability that is far ahead of any other continent in the world,” says Windischhofer. “Sustainability is probably the only industry where Europe is a world leader.”
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Austria has proved to be an ideal hub, he adds. Just over half of the workforce also live in Vienna.
“We had easy access to early-stage capital here; we had easy access to very good early-stage employees . . . and the grants we were able to get were really quite substantial for a young company. There’s a very good ecosystem here that supports start-ups, both with private capital and with public capital.”
Perhaps most importantly, however, Vienna is also a powerful selling point in the competition for talent in the European tech world, Windischhofer points out. “It’s been ranked the most liveable city in the world for something like the last 10 years and that means you can attract a lot of talent to move to Vienna, especially from eastern Europe — where most of our engineers come from,” he says. Refurbed staff hail from 50 countries.
But being based in Austria also presents problems, he admits. The country’s clunky corporate and tax laws — which successive conservative governments have promised but failed to reform — make managing a fast-growing business, taking in new capital, harder than in a city such as London.
Every time new shareholders are brought in, for example, appointments with official notaries are required to formally legalise new holdings. Employment taxes are also relatively high, he adds: “There are a few things on the bureaucratic side that are not beneficial.”
For now, these are an inconvenience rather than a serious impediment. Windischhofer says he expects Refurbed will continue to expand rapidly, even in a challenging economy. “In the current macro environment, we see that people are becoming more price-conscious — everyone is wanting to save money right now,” he argues, noting spiralling inflation and soaring energy prices.
“But people can’t cut electronics out of their lives. We can’t live without smartphones. So Refurbed is increasingly the best solution because we are cheaper, we have high quality, and high convenience.”
“People realise that they don’t need to buy a new iPhone 14 for more than €1,000 if they can buy an iPhone 11 from us, which is a very similar product, for a couple of hundred.”
Refurbed is now looking to expand beyond high-end electronics. It is rolling out refurbished white goods and has started to sell scooters and e-bikes. Eventually, Windischhofer says, the platform will expand into sports equipment and, he hopes after that, fashion.
He dismisses the notion that a titan like Amazon could do the same thing and steamroller competitors.
“Amazon always pushes new products,” he says. “They make much more money with new products than with refurbished products . . . And, from a consumer point of view, if you want to do the right thing, if you want to be saving the world, then it’s quite hard to [reconcile] that with the brand of Amazon.”