Team of “Millo”: CEO Ruslanas Trakšelis, COO Aivaras Bakanas
Year of contract: 2019
Investment received: around 1.5m EUR in total
Achievements with investment: it helped to develop the product and prepare it for sales
“Millo” began with a personal issue – the inability to use a blender quietly in the morning. Today the team has an ambition to change the appearance of the whole kitchen. Having acquired the recognition of such companies as “Miele”, “Bosch” and “Philips”, and accumulated around 1.5m EUR of investments in two rounds, the team of “Millo” together with their investor “Iron Wolf Capital” are preparing for sales and for the attraction of foreign investment.
How different is the initial idea of “Millo” from what you have actually created?
Ruslanas, Millo: At first, we purely wanted to redesign the blender. Later we realised that the technology is applicable for a much wider use. The are two groups of kitchen solutions: small domestic appliances, which include portable blenders, juicers and similar devices, and another group of built-in solutions. It became evident, that our solution was usable in both categories: for example, if it is a portable device, the technology is applicable not only for blenders, but also for juicers, coffee mills etc, – for all devices which have rotating parts. Just by replacing an add-on we turn the item into a smart device, without changing its appearance.
As regards the built-in category, we speak about cooktops which integrate both the rotating momentum integrated and the magnetic coil. Thus, the kitchen, as we know it now, is essentially altered: today we usually have a lot of devices for cutting, mixing, other tasks, and then we go and cook things in pots. With our technology, all those things may be performed on the same single cooktop, which already has a rotating engine integrated with a magnetic coil: this solution combines both functions of rotation and heating. It seems that from a simple intention to upgrade a blender we came to an idea how to revolutionise the whole kitchen. We are now at the point which is tremendously different from the original idea.
How did you decide to cooperate?
Ruslanas, Millo: In 2019 we attracted an investment and communicated with everyone who operated on the Lithuanian market, because there were not so many funds available here, overall. Everything went naturally and smoothly almost from the very first meeting with Kasparas. I knew Tomas and Viktoras from the “Iron Wolf” a little bit and I was aware they had a lot of good experience. We simply sat down, had a talk and it seemed that we could totally do well together.
"It seems that from a simple intention to upgrade a blender we came to an idea how to revolutionise the whole kitchen. We are now at the point which is tremendously different from the original idea."
Kasparas, Iron Wolf Capital: That story, I think, is even more interesting. We were curious about one start-up and were looking for an opportunity to boost it with competences, therefore we invited Aivaras, who is also a co-founder of “Millo”, to find out if he could be a consultant and share his experience from his previous activities. After a while, Aivaras came with Ruslanas and announced that he was raising money for “Millo”. So the discussion was split into two parts. After having a closer look into what the team was trying to do, and into the team itself, a decision was made to participate in that investment round.
We invest into start-ups at various stages, from early to quite late, thus respective indicators are evaluated differently. Two things, however, are always considered the same way, regardless of the investment stage: the perspective of the product in the global context and the team. We were happy to see that “Millo” gathered really talented people, who were also quite experienced with start-ups. The idea itself seemed quite interesting too. We saw a greater potential in the built-in category than in the blender itself, and it was significant that these ideas were patentable. We also believed that the idea corresponded to all the contemporary global trends: healthy lifestyle, mobility of people and decreasing amount of available space in cities. All these trends were clearly addressed in the product.
What have you achieved thanks to the investment?
Ruslanas, Millo: From last year to this year our goal was to launch production. It took a bit longer than we intended. Currently we are in the stage or certification of the product, it is being tested in accordance with applicable regulations. All seems to be running well. Of course, we are preparing for sales, and the communication plans have been already developed, so currently we are waiting on final clearances to kick off with the sales.
Last year we travelled extensively around the world, attended the largest exhibitions: “IFA” in Berlin, “CES” in Vegas, also “Seatlle Smart Kitchen” and “Ambiente” in Frankfurt. During the year we managed to prepare for the sales, and how the trade goes… we will see soon, if we had done our homework properly, since the launch of production is very near.
What were your main challenges to overcome together with investors?
Ruslanas, Millo: Those challenges are stumbled upon weekly. And you might never know what the upcoming week brings you. Mostly they are related to production, for many third parties are involved: it is to check whether the right things were produced or delivered, or whether things are produced in due time. In addition, since the product is still in the R&D stage, a small adjustment of one aspect may often lead to unexpected impacts in terms of other aspects. Such internal uncertainties add up with the challenges: there is often a mismatch between plans and actual outcomes.
"We were happy to see that “Millo” gathered really talented people who were also quite experienced with start-ups."
Ruslanas, Iron Wolf Capital
The longest delay was related to casting moulds for plastic – they were ordered in February 2019 in China. We expected them to arrive in October, but it didn’t happen until March. What was expected to be finished in half a year, took more than a year. Inevitably, such delays greatly affect financial planning, and many other aspects too.
Every week we have production meetings. Kasparas is a board member, so together with him we decide how to allocate resources, how to deal with all kinds of emergencies. Challenges, which demand immediate attention, are always present. Such common weekly meetings, where everyone knows the situation well, have proved their effectiveness. We have five people in the board, and five heads are always better than only two or three.
Kasparas, Iron Wolf Capital: To provide some more context, I would like to add, that we aim to invest into experienced teams – not babies, but into people, who do not need constant supervision and can be trusted. The model of our relations is such that we do not interfere and do not give marks, however, everyone is conscious of the fact that in case the team needs any help, they may reach out to us on weekends, late evenings, mornings, or any time, and we would react without a delay.
During the first half of the year, the model of our relations was a bit different. Initially we would have regular board meetings and also discuss things ad hoc, when they came up. Since the beginning of this year, our involvement have been increased when we noticed the lag behind our schedules. These were mainly a result of technical issues related to Chinese suppliers and other things. When we noticed the lag behind our schedules, I remember very well the day when Aivaras and Ruslanas visited our office and we decided to participate in weekly internal technical team meetings, in order to bring more intensive mindset and be closer to the team. As a result psychologically added some fresh blood. This step was beneficial for us as a fund too, because we could be directly in the heat of fire and hence understand better how we can help.
It gladdens to know that our role may be flexible: when help is required, we roll up our sleeves and become a part of the team, when there is no immediate need of us, we demonstrate our trust.
In what stage is your cooperation now: what are the goals of the company and the role of the fund?
Ruslanas, Millo: Every year we plan to attract investment, as it was in 2018 and 2019. This year we decided to launch production and only then to do the big round – we feel that first we have to demonstrate some quality growth, and to look for the next investment only after the establishment of the fact that we are producing and selling. It is likely that this year’s investment will happen in Q4, however, the preparation for it is already on the way.
We also have many contacts established with great companies, such as “Miele”, “Bosch”, “Philips”, and previously we had had extensive communications with them, however, only later we realised that possibly we had been in touch not with the right people, because that communication had not resulted in the anticipated results. Now we have shifted towards representatives of the groups of venture capital and merger and acquisition: we are now in touch with “Electrolux”, “Miele”, as well as with a large French group which owns “WMF”, and a founder of “Innocent Drinks” – brand sold to “The Coca-cola Company” for more than 500m GBP in 2013. We will have to communicate and talk even more, meanwhile, the support from “Iron Wolf” will continue. So we are preparing for the next stage: to launch the product and to secure a new investment.
"Challenges, which demand immediate attention, are always present."
Kasparas, Iron Wolf Capital: I would dare to say that our team in “Iron Wolf Capital” is unique in that all partners have worked or are working in international markets with various projects – from representing the same “Philips” or “Siemens” as bankers or consultants, to running start-ups and fundraising for them.
Our experience, network, the ability to understand and evaluate opportunities are our strengths. When we began investing this fund in 2019, we set a goal to improve the statistics of Series-A funding in Lithuania and the Baltics, because its metrics were lower than the average of the EU. The reasons for unsatisfactory statistics are obvious – start-ups lack support in understanding the expectations when raising money on the international markets, they also lack experience of working with or at multibillion business corporations. We strive to bring it all to them. In this context, one of the most fascinating things for me is that Ruslanas understands that attracting of an investment is not a process which takes only one month per year, instead, it is a constant development of relations in conferences, building on those relations by regular communication, as well as acquiring new relations and gaining trust.
How can we help “Millo” in addition to weekly meetings and contributing to problem solving, when necessary? We organise strategic sessions, where multiple partners are involved who help to expand the idea conceptually, to prepare a good presentation of it to international investors for the upcoming investment round.
Ruslanas, Millo: It is always great when someone challenges your idea, because you might often think you have a super great idea, but when you sit down and discuss it, you see how many things you have overlooked, and maybe it has to be improved. Strategic sessions are always useful, because involvement of a greater number of people with different experiences allows to improve everything significantly.