When the discussion turns to naming who Sweden’s most promising companies are right now (outside of Spotify and Klarna) you will often hear iZettle and Truecaller mentioned. One company you won’t hear as often though, is Saltside. This is despite Saltside being the only Swedish company who have raised anywhere near as much as the aforementioned companies (although BIMA have also recently joined this party) and having 500+ employees.
I caught up with CEO Nils Hammar to find out why that is, and what we can expect in the next 12 months from one of Sweden’s fastest-growing companies and its biggest under-the radar success.
First thing’s first, what is Saltside?
Saltside is building online marketplaces in frontier markets. We have operations and sites in four markets at the moment with West Africa and South Asia being our focus. We have Bikroy.com in Bangladesh, Tonaton.com in Ghana, Efritin.com in Nigeria and Ikman.lk in Sri Lanka.
How did the idea come about? What was the thought process behind Saltside originally?
Well, actually it was a joint exercise between myself and Kinnevik, where we sat down and talked about interesting business models and interesting ideas and where they could be done where they were not available at the moment.
Both classifieds and a bunch of other ideas came up during the process, but they liked classifieds a lot, and I liked it personally too, so we decided to go with classifieds. The thing with online classifieds is it works really well in frontier markets where the infrastructure for e-commerce is still weak.
If you go to Bangladesh it’s still hard to find a reliable delivery company or payment provider and traffic is a huge issue in these markets, so if you can build local marketplaces where people don’t have to travel that much for these transactions and you can pay offline it’s pretty powerful. That’s why it is suited so well to these markets.
From my perspective, I like that as a company we can take quality software and quality business practices to markets which most people wouldn’t look at otherwise. So, as a company we bring a lot of value to these markets in terms of having a solid platform and a nice way of doing business.
How do you choose the countries? How do you determine which markets are ripe for a solution such as this?
We look at pretty traditional metrics to evaluate the countries, what’s the GDP, what’s the internet penetration, what’s the competition, both horizontally and vertically and all of that combined gives us an idea where to go.
For us, West Africa and South Asia are very interesting because they share several characteristics, very big populations and rapidly growing. If you look at Nigeria, by 2050 it will be the third biggest market in the World by population. Similarly in Bangladesh, today it has 150 million people, a lot of them are young people and if you look forward thirty years you will see a very different World.
As population grows, GDP per capita grows, internet penetration grows, these markets are going to very attractive.
So, what markets are next for you?
Well, it’s pretty hard doing four markets at the same time! We’re pretty happy with where we are right now, these four markets contain 400 million people, that’s a pretty big market to try and win.
I’m not a big fan of the approach where you go wide and launch in 20 markets and see what sticks. I’ve done it previously and I’ve almost never seen it work. Even if you want to do one market, if you’re going to do that well and provide a lot of value and a strong product, it’s hard, you can’t do that by just sitting in your office and launching it remotely, I don’t believe in that model, for me it doesn’t work.
If we were to expand though, as a company we talk about serving underserved markets, and there’s a lot of underserved markets so I’m pretty open to the fact that at some stage we might, I mean there’s also underserved markets in Europe, so we could even do something there.
What can we expect from Saltside in the next 12 months?
We are building multiple verticals in each of these markets, we are not doing a consumer to consumer online classified play, it’s more ambitious than that. Our approach is about winning the verticals.
If we take Sri Lanka as an example, we are the biggest classifieds site where you buy and sell second hand stuff, but we are also the biggest car site by far, both for private people and dealers, and the biggest property site, both for individuals and dealers, and we’re also doing pretty well in the jobs vertical.
So, for me it’s more about really making sure we are dominating these verticals, and maybe adding something more exciting in terms of verticals we cover in our existing markets. I’m pretty excited about building products and operations that can really be world class in the vertical space as well as the horizontal space.
Why do you think you’re under the radar? Do you care?
When we started out we were keen on not telling anyone what we were doing. When we launched in Bangladesh we didn’t want anyone to know we were doing that, as it is a very competitive market, so I think that plays a part. We’re not a consumer facing brand, no one uses our product so from that perspective it doesn’t make that much sense for us to be making a lot of noise in the media. However, of course it can be important strategically for our employees and for the industry to be aware of us.
Should more Nordic companies be thinking about opportunities in the frontier markets?
I think that it’s common that you don’t really think about the big world out there. When I was living in the UK, you think about Europe and the States, and maybe the guys at the forefront think about China, India and Russia, but outside of that there’s not really anyone in Europe thinking about markets outside of those.
Although, perhaps Truecaller is a good example, they are someone who are building a business in these markets, that’s very cool and it’s super impressive what they are doing.
I also think that it’s a question from the entrepreneur’s perspective. This might sound cheesy but the impact you are going to have in these kind of markets by bringing quality software to them is huge, while if you build apps for the Swedish market it’s less of an impact, but it all depends on whether this is something that motivates you.
How fast are you growing? How many employees do you have?
We’ve just passed 500 employees and 90% of those are in the local markets. We have a development centre in Gothenburg and in Bangalore, India. But these offices are very small compared to our local operations, and that’s where we are growing quickly, as we have sales staff, support staff, and other functions all growing rapidly.
Can we expect you to raise again this year?
Well, we last raised $40 million and that’s a lot of money. You might hear from us doing another round, but you also might not. Everything changes so quickly, but we don’t need to raise again right now, but if the right opportunity comes along then who knows.
What’s the end goal for Saltside?
Our mission statement is to build leading online marketplaces in underserved markets, creating sustainable value for the community. That is our end goal. I want to build a sustainable business in these markets that are building a lot of value to users, investors and employees. Personally, my end goal is I want to build a successful business, which means creating a lot of value for everyone involved.
Finally, as a former-employee of Skype, where do you stand on the great Skype debate? Which country has the strongest claim?
I would say Estonia, Skype was about the product and the product was built in Estonia. So, I would say Estonian with a lot of international influences.
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