Newsletter 2022
Let’s do this!
In June 2021, I founded BBox Capital with the idea to invest in clever, design-led real estate manufacturers, provide them with a bit of a balance sheet and turn them into more profitable, resilient, and valuable owners and operators of their own real estate assets. BBox Capital‘s approach is to invest in founder-led businesses, take a substantial minority position and then work with the founders on an aligned vision and plan to grow and create a (more) successful business.
Repositioning from manufacturing to ownership, from one-off sales to recurring rental revenue
It is a relationship-based investment and management approach. Unless you work in the military maybe, commanding as a management approach is not sustainable. You can influence people and influencing needs a relationship and building a relationship takes time. While I appreciate a nicely written contract, you will have a better outcome reducing the time you spend on polishing a contractual relationship by 80% and invest it into an emotional relationship and a potential future friendship. Maybe this is strikingly obvious, but I have just seen often before that time is wasted pushing contracts around rather than focusing on building a genuine and meaningful relationship. Developing a business together while severely disliking each other is just not going to increase your chances of success.
Think long-term, think relationships, make friends and enjoy the journey
BBox Goes To Estonia
An ÖÖD Mirror House and Mirror Sauna in its natural habitat in Laheranna, Estonia
BBox‘ first investment was into the Tallin-based ÖÖD Group. ÖÖD designs and manufactures high-quality, movable, mirrored tiny houses (The ÖÖD Mirror House) and ancillary spaces like saunas and micro-offices. After having worked with the two founder brothers, Andreas and Jaak Tiik, for more than half a year, I had finally convinced them to accept BBox‘ capital. While at times I felt like performing a courtship dance, I do understand them. They run a growing and profitable business and they have had let‘s say mixed experiences with external investors before.
Going forward, we will invest into own Mirror Houses and either operate them ourselves or team up with complementary operating partners like exclusive golf clubs, vineyards, castles estates and countryside hotels who are looking for (additional) quality, beautiful and flexible accommodation space which they can offer to their customers. We want to provide a new type of hospitality. Individual hotel rooms placed in unique nature locations – secluded, adventurous, beautiful.
The founders, the team and BBox are doing this to create a long-term successful and an exciting business and we had a great start into our journey. In 2021, ÖÖD more than doubled its revenue and quadrupled its earnings and for 2022 we expect similar dynamics. We built up an exciting pipeline of new Mirror House sites across Europe and are looking forward to numerous site opening events in 2022. On the back of a successful year and excellent future outlook, BBox supported an additional capital raise at a valuation of 3x the buy-in. Paper money but it still feels good.
The aim is to develop the ÖÖD hospitality platform with thousands of ÖÖD Mirror Houses across the world, all providing a memorable accommodation experience in special locations with amazing views in a beautiful, private mirrored hotel room. We are convinced that travellers (like ourselves) are going to love that.
10,000 individual, mirrored hotel rooms, scattered around the world, all at unique locations
BBox Goes To Slovenia And Stays in Croatia
The First Oikos Village near Zadar in Croatia. Going to sleep and waking up right next to the Mediterranean Sea does make you a better person
In August, BBox signed its 2nd investment, into the Slovenia based company Oikos Housing. Oikos designs and manufactures beautiful modular wooden houses which grouped together form the Oikos Concept Villages. Oikos’ first village is located at an amazing, sunset-facing beach site near Pakostane in Croatia. Going to sleep and waking up right next to the Mediterranean Sea does make you a better person.
Because of their ‚movability‘ feature, Oikos was able to obtain planning approval to build its villas there. The elegantly designed houses are built with sustainable wood, are fully factory finished, minimising the on-site construction works to only a few days. SPS, the Slovenian Enterprise Fund, invested alongside BBox Capital and the capital will be used to firstly, build out the management capabilities to be the best Mayor possible for the next Oikos Concept Village (and increase the management fees) and secondly, retain a higher ownership of the houses to increase the rental income. Both investments will make Oikos more profitable, more resilient, and substantially more valuable.
Because of the houses‘ movability, Oikos can access relatively cheap land which houses with a traditional foundation could not. Because of the standardised and modular construction, Oikos‘ construction costs are moderate and less volatile. Because of its leading design, Oikos‘ houses command a premium rent. Because of its management capabilities and innovative operating model, Oikos earns additional management and service fees. In simple terms, Oikos has competitive advantages on the cost and revenue site, leading to superior profitability and high return on investments of > 25%.
As my parents like to say, make sure you spend less than you earn…business can be so simple
My role compared to my time as a Partner at a mid-cap private equity firm has changed, in fact, it is actually a completely different role.
From expected debt and equity capital raises and strategy support to less expected full-on product sales management, email drafting, visiting Lords & Ladies in Scotland to sell modular Mirror Houses and HR activities…it has all been there. They key learnings for me have been,
And so I take my ambitions and learnings into 2022 and am incredibly excited to support the BBox portfolio businesses on their path to become larger and more valuable, by offering and developing products which are exciting to its customers and foster a culture which makes it challenging, rewarding and fun for all stakeholders, in particular the employees, to work with us. And if there is time left, BBox Capital will look into further deal opportunities and also grow the BBox team.
Happy 2022 to everyone
Robin
©2023 BBox Capital Ltd.