It is unusual for any German startup to receive €7 million from investors to take it to the next level, but that is the position which online spectacles retailer Mister Spex finds itself in following the latest round of funding. DN Capital, the pan-European venture capitalist firm, led the round and French private equity investor XAnge was brought in as Mister Spex prepares for an assault on the international markets.
Since launching in 2008, Mister Spex has quickly become probably the largest online retailer for branded eyewear in Germany and reported sales last year of €4.5 million, while this year revenues are expected to exceed the €10 million mark. It has already sold spectacles, sunglasses and contact lenses to around 150,000 customers. The young company currently employs 90 staff, 50 of them on permanent contracts.
The investors backing Mister Spex
In what was Mister Spex’s second round of financing, DN Capital and Xange joined existing investors Grazia Equity, the High-Tech Gründerfonds, Team Europe Ventures and Ventures Astutia for a total capital investment of over €7 million.
DN Capital is a venture capital firm that invests in promising media and technology companies in the start-up and growth phases. In addition to financial support, DN Capital also takes an active role with business development and formulating strategy for its portfolio companies. Recent investments by DN Capital include Shazam, Endeca and Tbricks. Branches of the VC firm can be found in London and Palo Alto.
XAnge is another heavy-hitting European private equity firm, with over €350 million in assets under management. Founded in 2003, it specialises in Internet- and network infrastructure-related projects. XAnge is backed by La Poste in France and a host of other leading European companies and financial institutions, including Deloitte, Laser-Cofinoga and Allianz France. The firm conducts its German business from an office in Munich and benefits from a strategic partnership with Deutsche Bank Group. Mister Spex, in which XAnge is a minority investor, joins 65 other companies in the XAnge portfolio.
Mister Spex plans further internationalisation
Dirk Graber, founder and CEO of Mister Spex, is pleased about the investment and gave an insight into how the business was planning to spend the money: „The new capital will in particular finance further growth projects. First, we aim to expand our marketing activities in Germany to increase brand awareness of Mister Spex. On the other hand, after the successful launch in France we want to roll out our business mode to other countries and build the leading online opticians in Europe.“
So far the Berlin company is active in Germany and France, while in the English-speaking market it goes head to head with Glasses Direct, Europe’s largest online retailer of eyewear. Founded in 2004 by Jamie Murray Wells, Glasses Direct proved the business model, offering massive savings on eyewear thanks to low overheads and the economies of selling on the Internet – savings that are passed directly on to customers. In April last year, Glasses Direct concluded a financing round of approximately €11.2 million.
Now Mister Spex has secured its own handful of international investors, who can help the push abroad while cementing the company’s dominance on the home front against competitors such as Brille24.de and Netzoptiker. „Besides the financial aspect, it was important that our new partners could also assist with industry knowledge and personal contacts in the major European markets,“ says Dirk Graber of his choice of investors.
And what convinced DN Capital and XAnge? According to stakeholders, they were won over by the business model and the enthusiasm of the management team at Mister Spex. Nenad Marovac, Managing Partner of DN Capital, sums up the deal as follows: „The current growth of the company and the dynamic management team have impressed us very much.“ Bernhard Schmid, a partner at Xange, added: „We believe that Mister Spex is poised to build upon its leading role in the German market and successfully expand into other countries.“