The Big Exit Show: Selling TAPPwater, TAPPing into Success Magnus’ Journey from Start-up to Big Exit

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🎧Our conversation with Magnus reveals his journey from celebrating Tap Water’s first online sale to the eventual acquisition by Blue Water Group. With a deep dive into the strategies that led to 80% of their sales being organic and 20-30% of new customers coming through referrals.
We’ll discuss the pivotal moments like launching on Amazon, emphasizing convenience over sustainability, and the importance of hiring adaptable problem-solvers for a mission-oriented startup.

During our interview with Magnus we talked about:

  • The Power of Organic Growth
  • The Art of Selling Your Business
  • Navigating the Sale of a Company
  • Referral Marketing as a Growth Lever

As always – hosted by Peak’s very own co-founder and managing partner Johan van Mil and Anke Huiskes founder & managing partner of NP-Hard Ventures 🕺🏻🕺🏼

You can find the episode on your favourite podcast platform, linked below. And, if you are really interested in listening to the big exit of specific founders – reach out to us so we can invite them for the next episode!

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You can find the transcribed version of the episode below:

Johan (00:01.553) 

Starting a company that’s easy, keep on growing a company that’s harder. But selling your company, well, that’s a whole different story. And in the Big Exit Show, we lift the curtain of secrecy around selling businesses by learning from ambitious and successful founders who’ve also been on that roller coaster. Our host, Anke, together with me, Johan, and we are from MPHard, Anke, and I myself, Arp van Pieck. We help you on this exciting journey to learn. 

And in this episode, we have a guest who is actually based in Spain, now sitting at his mobile cabin. So that’s funny to hear, soon to be jumping on the surfboard again, probably. But Magnus Jurn is a serial entrepreneur. He started a lot of companies, also as an investor, but also as a non-exec, and served as a CEO and founder of the company of TEP Water, which was acquired by Blue Water Group. And prior to this, Magnus was a CEO and founders of different companies. 

For example, he started the company Golden Gecko, which was acquired by DMI in 2014, but also he was 17 years active as a pioneer with all kinds of mobile services. So he started in total more than seven companies, including companies as Drift, Bollagat, Lecce Mobile, GeoMe, and as mentioned, TapMobile, where we’re gonna zoom in right now. Welcome, Magnus, welcome to the show. 

Magnus (01:23.794) 

Thank you for having me. Super excited. 

Johan (01:26.757) 

Cool. So tell me how, especially about Tap Order, because you started different companies, right? How did you ran and how did you came onto the idea of the Tap Order to start it? 

Magnus (01:38.162) 

So yes, I’ve been extremely fortunate in the past with having several successful startups in the tech space. And after selling Golden Gecko and also EncomVA that was co-founded with my dad around 2013, 2014, I was planning on just being semi-retiring and just investing and helping other startups. But then as you spend a lot of time with other entrepreneurs and… 

creative people we constantly came up with ideas and I got really excited about doing something in the impact space and particularly because I love I love the ocean I love beaches and I could just see it was just so sad to see like the amount of plastic and waste that washed up all the time and also living in Spain since 2008 or something like that 

I could see that everybody was consuming bottled water. So I got really interested in that topic and we explored various different business startups and we thought, okay, if we’re gonna have the biggest possible impact, we need to get households to stop buying bottled water and replace it with something else. And that’s how we came up with the company Tapwater. And as my background is really tech and like human-centric design and so on,

We started by just testing and testing and testing lots of products. So we tested over 30 different products that were in the market with consumers. We did trials of different kinds. And after a lot of the tests, we found one that actually seemed to work. And we tested it with a hundred people. And this was called Tap One, which was around 2006, 2007. And all the people loved it and said, wow, this is life changing. Suddenly I don’t have to buy bottled water. 

So based on this, we decided to start a company, raise a little bit of money, and develop our own products from scratch. And so that was the very beginning. We thought, I mean, and this is one of the challenges, obviously, as entrepreneurs, you have to be crazy optimistic about everything. You have to believe that you can change the world. You have to believe that you can change human behavior and that you can do things that nobody has done before. 

Magnus (04:00.726) 

And we thought, all right, if we launch a product that saves people money, which our products do so people spend on average in Spain, like 300, 350 euros per year on bottled water, they carry home a thousand kilos of water every year. And with our product, you don’t have to carry home any bottled water anymore. It was also starting to become obvious that bottled water is probably not that healthy, considering there’s micro plastics and hormone disruptors. 

And then finally, it’s bad for the planet. So we thought, okay, we have four strong benefits like this, it’s gonna be easy. So we projected that we’re gonna get 100,000 customers within two years. That was definitely not the case. I think we probably did hit like 5,000 after a couple of 

years. But the thing is, changing human behavior is really, really hard. Like people do not, and we also saw that 

uh like the echo message so everybody says that they want to live eco-friendly lives but in reality when it comes to the choice of continuing to buy a product that you’ve been used to buying and changing it’s hard so yeah there and then the third thing my background was from software and producing hardware is really hard like you have to design things that are going to be used like 20 30 times per day with high water pressure 

so many different things they have to be shipped across the world because actually like we conclude we wanted to make the products in europe but realized it was very hard so they’re they developed in china which means you know it takes it takes long lead times to develop ship and then get them into the warehouse and then you realize after a couple of months that there’s issues and you have to start over again so it’s been a challenging journey to say the least but that that’s the kind of that’s the beginning 

Johan (05:54.637) 

Thank you. 

I can imagine Magnus. By the way, something for you also good to know, if I raise my pen,

perhaps we can cut this out of the recording kitchen, then I’m gonna ask a question about what something what you said. That’s a signal from me to Anke, but also perhaps good for you to know, Magnus, because then I don’t have to interrupt you, right? Hey, Magnus, you mentioned something really interesting, right, one question, because you mentioned that you want to grow until, let’s say, within two years to 100,000 appliance sold, right? But you raised, sorry, you got to five. 

probably had a few, let’s say really pivotal moments, right? Really a few big breakthroughs which gained traction in your business. Can you mention a few which really stood out in your, let’s say, looking back to the growth phase? 

Magnus (06:42.298) 

I mean, it’s fascinating because when you, especially when you’re a direct consumer, like you really do celebrate every win. So like the first sale that came through on our website, we were like, that wasn’t influenced by us. We were like, boom, whoa. So our little team of four people, everybody was jumping up and down in the office. So that kind of thing happened, I think. And 

then we celebrated, like once we got to 100. 

And then you celebrate when you get to a thousand. So, but I think, um, one of the really interesting things early on was that we actually, we noticed that it was fairly easy to build organic traffic in this space. So, uh, about 80% of our sales were actually organic. So that was from our website. The other big thing, uh, pivotal moment was we launched a product on Amazon. And although it took a couple of months, but it’s actually quick, like quite quickly. 

started to, and this was after I think one and a half years, something like that. So that’s also where we started to see strong growth. And then a third thing was we realized that actually the sustainability message that we had built the idea around just didn’t resonate with consumers. So we changed it to focus on convenience and cost savings. And that made a huge difference in terms of advertising. Like suddenly people went from 

just clicking to buying the products. 

Anke (08:13.023) 

And that probably also changed the way you message the product, like in your SEO campaigns. You also learned that it’s a different type of customer that then went on to purchase the product. 

Magnus (08:18.022) 

Yes. 

Magnus (08:27.527) 

And then another thing that’s a pivotal moment is when you have a large enough base to start asking your customers to refer to, like to become sellers themselves, that actually had a really big impact. Because I think we had like 20, 20 to 30 percent of all new customers came from

referrals and they still do actually. So we’re still at those numbers. And obviously that doesn’t really help. When you have a hundred customers, it just doesn’t help much. 

Anke (08:45.858) 

Hmm. 

Magnus (08:54.118) 

But when you have five files and then 10 files, then suddenly that makes a big impact on an annual basis. 

Anke (09:01.666) 

And when you started the company, was the idea for you… Oh. 

Johan (09:04.465) 

Sorry, I think we have a Slack message. I think it’s not on my side. Sometimes I hear a Slack tick, tick announcing. I think it’s also in the recording. Is it with you, Magnus, or with you? Might be. Great, thanks. Sorry to interrupt. 

Magnus (09:15.163) 

I’m gonna see if it’s my… 

Yeah, I’m gonna see if it’s on my site. Sorry about that. 

Hmm. Let me see if I can… 

Johan (09:28.289) 

I also had my phone, somebody calling me so I had to put it off. 

Anke (09:32.786) 

I’m a… Completely shut up. No. 

Johan (09:34.873) 

You’re fully, uh, a little folksmart, aren’t you? 

Magnus (09:38.554) 

Alright, hopefully now. Alright, let’s continue. 

Johan (09:41.286) 

Thanks. 

Anke (09:43.626) 

My question was when you started the company, because you started at previous companies, which you sold, when you started this company, that you had a certain angle in mind, was this

company like, I want to bring this IPO or I want to always keep it private or I want to sell it, I want to turn this into a lifestyle business at some point. Like what was the idea when you started this company? Because it’s definitely a different kind of company, I think, compared to the previous tech businesses. 

Magnus (10:08.83) 

Hmm. So I don’t really believe in having like selling the company or being acquired as an end goal. It’s like build a great business and whatever you want to do will happen. So that, that was kind of our, our end goal. What we did say though, is that we really wanted to build something that was like before even considering doing something else, we wanted to build a business that was big enough to be like, to continue, um, with. 

whomever, like if we sold it, that would kind of sustain itself. Because one of the challenges and specifically in D2C is that, or actually in any business, is that a lot of companies get acquired and then after a year they get shut down because the buyer, like it’s just not big enough business for them. So, you know, we considered, for example, okay, if we wanted Unilever to be our buyer or Nestle or someone like that. 

You have to have significant enough numbers to make it interesting for them because it has to become a billion dollar business within a few years. Otherwise it just doesn’t make any sense for them to focus on. So, so in that sense, we had really big ambitions from the very beginning because we knew that we had to get to that, that stage if we wanted to do something with the big companies. And otherwise we were like, let’s just continue to build this on our own. It took. 

If you look at one of them, obviously as being Swedish, one of the inspiring entrepreneurs for me was Ingvar Kamprad and it took him at least 10 years before it was really a strong business, before he got beyond the first door. So it’s okay that things take time as well, I think. I think as entrepreneurs, we’re often very impatient, like impatient. But in this case, we have time to make it grow. 

Anke (12:00.886) 

And maybe to that point, because you’ve been doing this multiple times, what was… Definitely helped you, I guess, because you’ve been going through like growing pains. What is your feeling about… Was it easier this time around? Because you had a kind of like a thick skin already. 

Magnus (12:22.962) 

No, I don’t think it ever gets easier. Maybe also because you increase the barrier, like you put bigger and bigger targets on yourself. So it’s never going to get easier. But I mean, certain things get easier, like certain things you really get to understand, the importance of having great people, like really, really focusing on hiring and selecting the people. That was a huge focus area for us. And I think…

that really helped from the very beginning. But then, because it was also the first time I did something in hardware, we really tried to bring in specialists in the hardware space, but we found that that’s really difficult in Europe because there’s just not many people. We just don’t do much consumer hardware. So to find people that have the experience in that space and that have been successful was very, very hard. 

And that has had a big negative impact on us. So that’s the piece that have taken the longest time for us over, to get a grasp of, to understand the processes, to make sure that we get the quality in production and all of these things. 

Johan (13:35.157) 

You mentioned on hiring, right? I think it’s a big learning that a lot of founders have, right? Especially if they start a second or even third, and in your case, even seventh company, is to hire stronger people. Can you, let me double click a little bit on that. What are you looking for? What are, let’s say, the key characteristics where you’re looking for, but also what are, let’s say, the things that you’re not looking for? How do you select the right people? 

Magnus (13:56.77) 

Yeah, I mean one thing is, yeah, so one thing is the criteria. So I think we have very strong criteria in like, that people have proven themselves and being able to be like creative and problem solvers. Like you really want problem solvers. Because you want people that can solve things on their own that are not dependent all the time on going to their manager or that, or to going to me as the CEO. 

So examples of that has always been a super critical thing. And both problem solvers individually and problem solvers as team members. So that’s been one of the critical questions that we’ve asked. And this also means that they could come from a big company background, but also having worked in startups, you can really get people from both. 

But it is a challenge as well. Like the other thing that you see is that if you hire people that have back, like that have worked in corporates, they have, they’re used to having a certain support structure and it’s very difficult for them to adapt in the beginning. So they’re used to having professional HR, to have processes in place, to have people that can do everything for them. And when you’re in a startup, you want people that can do everything themselves. You also want people like, and this is like in marketing, for example, 

If you hire people from bigger company, they’re used to having lots of agencies that do all the work. But actually, in a startup, ideally you want people that are used to hiring freelancers to do individual tasks. So you need to do logo. Great, I get someone on Fiverr. They will do it for $50. Boom. And the next thing, ads. Boom. So those kind of things. The other thing I would say is just about the volume of candidates. So that’s been a key learning as well, is that the more candidates, the more interviews you do.

Anke (15:48.23) 

Thank you. 

Magnus (15:53.006) 

the greater quality typically you do get. So I think we’ve always been striving to get a hundred like minimum a hundred and ideally 200 candidates per roll before we review them. And we’ve been lucky enough as well like when you’re in the space that is a mission impact oriented company you do get a lot more candidates. Like people today really want to work in these kind of environments, so we definitely get a lot more applicants than you would get if you were just 

Like actually compared to an app developer, for example, today, because there’s just, that’s just a very different business. 

Anke (16:30.438) 

And I guess also the fact that you’ve been doing this like a successful serial entrepreneur, it’s probably also easier to find a great talent, because people want to learn from other successful people. So I can imagine that also helps over the years. 

Magnus (16:43.086) 

Yeah, that’s true. That’s absolutely true. 

Johan (16:48.862) 

And then there was a moment, I was ready. 

Magnus (16:49.118) 

And then, yeah. 

Yeah, and I mean, I think, and then also mixing it up the right way between having a certain seniority of people and just really fresh people that come straight out of university, lots of interns, like lots of people that are just eager to learn, learn and test. That’s also been a good mix. 

Johan (17:12.017) 

to your, and then in a certain moment, you started to realize that you needed extra funding, right? You probably invested some of your own money also into the company. I watched you pitching at NOAA, I think in 2018, right? With a good pitch for all the investor. Didn’t happen to be there, but what was your learning also as an experienced entrepreneur, right? In raising funding those years, because it was a different time than we are today. Can you elaborate a little bit on that? Also to take the founders who are listening right now. 

Magnus (17:24.733) 

Yes. 

Johan (17:40.721)

with your learnings to raise funding for a company like that. 

Magnus (17:45.206) 

Yeah, this is also like, it’s a big difference between like the tech space and what we were trying to do because I mean, since my background was tech and I actually found it quite easy to raise money in that space. Typically you would pitch to 10 VC funds and you will get two or three that were entrusted and then that was it, you didn’t have to do more. 

Or in some cases they would be contacting you. In our space that’s definitely not what happens. So we had to reach out to about a hundred fans. And most of them were simply just limited. They would not invest in anything related to hardware. I would say like 90% will not invest in hardware. And even consumers. So it’s a lot like you have to take an enormous amount of rejections. The other problem is that… 

A lot of them were actually interested in talking to us because they really liked our mission but then it was always the same thing. Sorry, our investment criteria don’t actually allow us to invest in this. I tried with my boss so we realized it just wastes a lot of your time. So you have to be… So actually one of the key learnings there was make sure that you ask the right questions to the investors as well from the beginning. If you don’t invest in a space… 

I understand, but don’t waste our time. And also the other thing was ask, because a lot of the people were open to talking to us, we asked them, like, who do you know? So actually that’s how we in the end ended up getting Bluewater as an investor and also Jabe or other investor. It was introductions from people that we spoke to. And people are really open about that. 

Like if they take the time to speak to you and you ask them, you know, who else do you know that might be interested? If they’re not interested in themselves, typically they’re happy to make the intros. And those warm intros, they always respond. So whereas the cold, like when you reach out to VC fans by cold email or their contact forms, maybe one and three, one and four response. Whereas if it’s an interaction, you will get a response every time. So that is a rule. 

Anke (20:04.422) 

And have you ever considered doing crowdfunding? Like I, during the 2013, 2014, I was with Pebble, which was like also hardware consumer device and we went on crowdfunding, which was like first a 10 million round and then 23 million from the community, basically. Was that also, and this was obviously in the U S where Kickstarter is a bigger thing than in Europe, but has that been a thought during that period? 

Magnus (20:19.922) 

Hmm. 

Magnus (20:31.318) 

Yeah, so we actually did an Indiegogo campaign, but I think we raised 20,000. The limitation

was basically that we’re based in, like, that our core markets from the beginning was Spain. And that’s very limited in terms of that space. But you’re right, if it had been in the US, I think there would have been a massive opportunity there. I would have focused a lot more on that. And the same thing actually, also with investors, like angel investors through these kind of platforms. 

Anke (20:43.052) 

Yep. 

Anke (20:52.278) 

Yeah. 

Magnus (20:58.962) 

because you can see a lot of customers were interested in investing in us. But, but again, you’re much more likely to be able to raise money through that than the UK or US or Australia in certain markets, then maybe in Southern Europe. 

Anke (21:13.229) 

Yep. 

Johan (21:15.565) 

And one last question I think on the funding indeed, because you raised, I think your series A with Blue Water Group also at that time. I mean, you’re a very experienced entrepreneur and you probably know all about, let’s say, the risk in having a strategic investor early on board and especially in an exit later in that company. How did you deal with that, especially with that? Because that’s for us as a VC always, as you can imagine, right, always an important point to limit that kind of risk. 

Magnus (21:42.006) 

Yeah, it was actually in this case, it was kind of easy because their investment fund was completely separate from the core business. So we didn’t actually really consider that to be a problem. But otherwise, I agree. We had conversations like that where we said, no, we don’t want to do it. 

Johan (22:05.605) 

Good to hear. I have a lot of questions on that, but that’s I think for another occasion. Then let’s go to the exit also looking at the time, right? What was the moment Magnus that you started to realize it was about time to sell your business? What was that, let’s say, inflection point? 

Magnus (22:09.788) 

Yeah. 

Magnus (22:22.342) 

Yeah, so it was probably like it was actually towards the end of 2022. Part of it was that so I was

not the CEO from the beginning. We actually because during this time I had my first kid and then my second kid and I knew this was going to happen. I really didn’t want to run a company again at this time. I wanted to have someone else managing the business and we had a great 

woman running the team, super good CEO, but after a few years she she’s basically said I want to continue to run this business, but I don’t want the pressure of continuing to raise money I just want to focus on profitability and do it my own way And if you’re okay with that, I will continue if you’re not okay with that then you know I’ll leave and do something else and let you find someone else to run it and So that basically means that meant because our ambitions were really to grow it and do something big 

We had unfortunately to make a shift there And then we brought in an external CEO for a year and then He also for various reasons decided to leave and suddenly there was no one to run it Like we could not hire another external CEO again. So then I said fine I’ll take over but one of the conditions for this is that 

We need to find a way of making sure that we have a stable future, something that works. And the other part, so that was one part. The other consideration was that it’s actually a very capital intensive business because of what we said before with hardware. So for example, if we receive a retail order, so some stores in Germany buys 10,000 products, then that might mean that we have to make an order. 

to our factory for three, 400,000 US dollars, that has to be paid straight away and we get paid six months later. So you have very long payment periods. And this meant we would have to continue to raise money constantly. And the VCs are not very keen to fund that kind of business. So it just meant that if we wanted to continue to grow in that segment, we had to find a different type of ownership structure. 

Magnus (24:40.882) 

So those were probably the main two considerations. And then third actually was that, we’re doing pretty well, we had fairly good numbers and you never know when something happens. Like what if there was another COVID that would hit us or something like that? My background, the first startup that I was, like the first serious startup that I was involved in, in Sweden web hosting company, we got offered a hundred million US dollars for the business in, what was it, February 2000. 

and then one year later we gave away the business because our board wanted a little bit more money. So we were a bit greedy. So the other consideration here was that if there’s an interested buyer that is willing to pay a price that is acceptable to you and that you feel that the business will continue and there’s an upside and all of that, and sometimes you just say, great, let’s do it. We succeeded. It’s fine. 

Johan (25:36.837)

Especially in this case, you had an investor also on board. How did these talks went? Because I can imagine, because they are already an investor. They saw that indeed the first CEO was leaving, who was, let’s say, wanting more profitable business than the second left and you took it over. Did you also reach out to other potential buyers on the net, or was it, let’s say, a more, I wouldn’t say a set deal. 

Magnus (25:59.118) 

No, no, we absolutely, I think you have to because otherwise you cannot find a price. So we had two other bids that made it possible to find the right price in this conversation. Otherwise it would not have been possible. 

Johan (26:04.045) 

Yeah, it is. 

Johan (26:12.569) 

And how did you do it? 

Anke (26:13.959) 

And were you leading the way or did you work with a corporate M&A like an external party doing the work for you? 

Magnus (26:19.89) 

No, I led the way because actually during the journey we had been speaking to so many companies that were interested. It was just a question of like was it the right timing. So I think this is also something that you learn maybe after a few startups is that you want to talk to lots of people during your journey and keep those doors open. So you never say no. You might tell them not now, not now, but you keep on updating them and that’s what we did. 

So, wake up. 

Anke (26:49.846) 

This is such an important insight. I think we’re hearing this over and over. This is such an important insight that it’s not like in the last few weeks before the acquisition, it’s basically years of building up relationships and creating optionality. 

Magnus (27:07.217) 

And they even knew, I mean this was the thing, the other companies also knew that there was a pretty big chance that Bluewater would outbid them. So, you know, it was… 

Anke (27:19.234) 

been 

Johan (27:20.273)

Isn’t that the risk because I was referring to that also Magnus, that indeed, let’s say, having a strategic investor on board who has the first right always, did you also experience that in, let’s say, the sales process that you had a strategic investor on board, so if somebody else would 

pay the price, sorry, would put the price down, then existing investors could bid them out? Was also what you experienced on that end? 

Magnus (27:28.143) 

Mm. 

Magnus (27:43.251) 

Yeah, but I mean in reality you always have that situation though because someone can always outbid you. So in this case… 

Johan (27:51.985) 

See you. 

Magnus (27:54.62) 

Oh. 

Johan (27:54.781) 

agree, only in this case they were already right as shareholder, right? So they had that internal insight and normally they don’t have that internal insight, right? And at first, right? 

Magnus (27:58.206) 

Yeah. 

Magnus (28:03.142) 

That’s true. Yeah. No, that’s true. No, like the questing came up. But again, because the teams within Bluewater were separate, so actually the person that was on our board was not involved in the Bluewater Core business, he basically said, I have no insights into the core company. My 

only goal is to make the most out of this investment. So he did not have any goal at all of acquiring us. So I think that helped. 

You need to play people right. And also it really helped that we had another VC on board because they were just interested in getting the best deal out of it. So that’s also, like you have to position… So Christian from Jabea was extremely helpful and useful in the process. He was the one that was leading the way together with me and Bluewater took a very hands-off approach on that. 

Johan (28:43.002) 

did. Yeah. 

Anke (28:58.626)

Can you give us some insights of what he did for others listening to this? Like, this is why this person was super helpful in that process. 

Magnus (29:09.138) 

Um, I mean, one was, he was, uh, um, like he tried to really take the position of a buyer towards me. So, you know, we, like when we were going through the pitch, the pitch, uh, calls and the presentations, like he was the one that was criticizing, asking the hard questions, pushing, instead of being the supportive seller. Um, so that’s like, that’s great when you have a friendly person. 

that actually really questions you, which means when you go into the meetings, you’re well prepared. I think preparation is just so extremely important. And in these situations, it’s hard because maybe you only have like three big chances. And if you screw up one or two of those by not being properly prepared, maybe the first one that you go into is the one that would have been the potential buyer and you were not prepared because you didn’t really know what questions they were going to buy, like what they were going to ask. 

So I think preparations are extremely important and that was one of the most helpful things here. 

Anke (30:13.518) 

And from my understanding, how long was that process? Was it weeks? Was it months? 

Johan (30:13.87) 

Interesting to hear. 

Magnus (30:20.326) 

And I think it was about three months to finding, to agreeing on a, so to getting the bids. And, but then, yeah, then it took another three, four months to actually close it. And I think that’s also something that I’ve seen in a lot of, like I’ve actually seen a lot of startups that have failed and collapsed just because of the timelines. 

because they didn’t consider the fact that you have to have a cash runway that lasts for much longer when you’re going through a selling process and you get into difficult positions when you have VCs that might not want to continue to put in and loans and so on so yeah but that worked out well in our case. 

So I’ve seen, I mean, the fastest process I’ve seen was three months. But I think in most cases they do take much longer, especially when it’s corporates who are selling the big campaign. 

Johan (31:28.319) 

Okay, I’m thinking out loud. Anke, should we go to, let’s say, the valuations? Is that an idea? The guesstimation, because Magnus, as you probably know, we also always have to do for the

companies that, sorry, for founders, we do, somebody on our team makes a valuation. I’m looking it up right now. Is it Kisha, because you’re listening with us, is it possible Kisha to play the recording of Tim, because he already recorded it? 

Anke (31:28.941) 

Okay. 

Anke (31:33.3) 

Yeah. 

Johan (31:58.769) 

Waiting for a moment for Kisha to… 

Anke (32:07.3) 

She just texted. 

Johan (32:10.225) 

She says, hmm. Because I have to look it up a little bit moment because I closed all my tabs. Let me look it up. 

Anke (32:10.954) 

Hmm. Oh, that’s not a… 

Magnus (32:21.534) 

I did look, I went through it actually. 

Johan (32:24.577) 

Ah, okay, good, good to hear. Let me… 

Anke (32:32.042) 

I don’t think it works. So maybe we can 

Johan (32:32.258) 

Let me know really. 

No? Okay, let me then… Here, Tapwater, here it is, yes. Shall I read it out? Perhaps it’s good, right? And then we talk about the same thing. In September 2023, Bluewater Group, part of Bluewater AB, the Swedish VC and PE investment company announced the acquisition of Tapwater. When assessing this deal… 

Anke (32:45.911) 

Yep.

Johan (33:03.237) 

There are two things to consider. First, the business model is quite special as we are talking about consumer hardware that issued a subscription base. And secondly, is Bluewater’s involvement previous in the acquisition as they participated in the previous funding rounds of TEP, which might also have an impact on a competitive officer in the M&A process. So let’s look at previous exits in the consumer water industry to check for the multiples paid. 

One example is the acquisition of SodaStream by Pepsi and Co. in 2018 for a total of 3.2 billion USD and they were bought at a last 12 months revenue multiple of 5. Well of course the SodaStream recurrency is higher, the frequency, but also it was acquired at a different timing of growth and of course a higher brand value was also attached to it. Another company that was acquired in the water filtering industry was the Austin based 

Aquaziana by Ayo Smith Corporation in 2016. Aquaziana serviced 200,000 clients with 100 employees, and the revenue was indicated 44 million USD. And the acquisition price was 87 million, and two times the revenue multiple for this acquisition. TAP mentions on their website that they serve 100,000 customers, which, if we assume, 

the average spent per year is 90 euro based on the product price would bring the annual revenue to 9 million euro. If we apply a two and a half times multiple on the revenue then we estimate sorry then we estimate the exit valuation of TEP would be 20 and a half million euro. The second point for the valuation estimation is the investment of Bluewater Group into TEP in 2021 with 2.6 million euro. 

If we calculate it with an average 20% dilution at that point, then the company would have been valued at 13 million post-money back then. And if we assume a 60% increase in valuation two years later, with a comfortable growth at that point of exit, this would be the valuation of 21 million euro. Therefore, the summation of this exit would be between 20 and 22 million euro. 

Johan (35:21.853) 

very curious to hear your thought on it. 

Magnus (35:26.578) 

So if it had been in 2021, you would have been spot on because we actually had, like we had offers exactly around that number. But because it was 2023, the numbers, the final number is a bit lower, but it’s not too far off. So I think the big thing that happened, and this is obviously a lot about timing. So the D2C space had a big drop in valuations generally, 2022, 2023. 

Johan (35:36.462) 

Oh wow. 

Magnus (35:56.054) 

and then just the general investment climate valuations went down. But I think that’s like it’s the

kind of things that you can’t do anything about. You just have to accept that valuations are independent of what you do. Sometimes they’re too high, sometimes they’re too low. They’re never… 

Johan (36:17.307) 

You never know, you always know afterwards, right? 

Magnus (36:20.182) 

Exactly. But yeah, it’s a good estimates and valuation of the business. 

Johan (36:28.517) 

Good to hear. Thank you for that. 

Anke (36:28.878) 

Maybe to the point when you’re talking about like timing, momentum, some things are out of your hand. There’s also so much luck involved, I guess, just when we talked previously about like COVID, like who could have expected that to happen. Looking back now, after all these companies that you started, and to our listeners, could you share one or two key insights that you learned throughout the years? 

Magnus (36:35.39) 

Yeah. 

Anke (36:55.314) 

for those who are in that trajectory of thinking maybe about a potential exit. 

Magnus (37:03.919) 

I do think that it’s really important in your head to have some kind of goal. So you might not want to communicate it to anyone, but you should at least know yourself. Like what will make you happy if you receive an offer? Also because of the fact that something could happen, like in the case, so in one of my first startups where I’m in retrospect, 

No, I was a small shareholder in it, so I didn’t have the influence of the business. But the point is, I think it’s great just to have that figure in mind because then, yeah, what would make you satisfied? And then maybe if you get the offer, even if it comes before you had planned on, it can be life-changing for you. If you’re 30, 35, it can really create a base for the rest of your life. But it can also be that you don’t care. 

Like money is not important for you. And if it’s not, then just keep on going. Like why, why exit? If you love what you’re doing. So I think that, but it’s really important to put these things into perspective. You know, I’ve, I’ve had a philosophy that I want to change my career completely every 10 years. I want to do something completely different. And, you know, I know that if I had done something in the tech space, I’m sure I would have been much like the chances of

success would have been much greater. 

and the valuations are much higher and so on. But I wouldn’t have learned as much as I did in this case. I learned so much more by doing something completely different. And also going into a space where not many people want to do with things. There’s just not, to invest a lot of money into this space, that is, it’s hard to change human behavior, it’s hard to develop hardware. There’s so many things. So I think we also need. 

people maybe that have been successful in the tech space to go into completely different businesses and try things that people might not wanna do from like, they’re much higher risk, but on the other hand, the reward in terms of the impact that you can have in the world is much greater as well. 

Anke (39:12.586) 

Yeah, the crazy ones. Maybe as last question from my end, especially when you’re talking about like maybe every decade you want to do something else and I looked up your 2023 predictions waiting now for the 2024 predictions from your end. What is next for you? 

Magnus (39:14.012) 

Hmm. 

Magnus (39:33.85) 

So right now I’m really focused on Like as part as part of becoming part of Blue Water Group I have a commitment to continue to run the company for the next couple of years. So I’m completely focused on that But you know, I do see Enormous opportunities in the AI space, of course, like everybody does especially in changing like changing old businesses So maybe not like so much of the AI space is focused on new 

new exciting stuff where I see the opportunities are how can you change businesses that are 30, 40 years old and the industrial space, family business and so on. Especially in Europe because we need to become more competitive. There’s such an opportunity to improve things in Europe. That’s probably where I would look but I have not decided on anything at the moment. 

Anke (40:30.21) 

Very interesting, totally with you. Yolande, maybe a last question from your end. 

Johan (40:34.453) 

No, it would be great to have you after your next decade of experience, to have you again on the show, right? Probably with a great exit, a great story like we heard today. So really, thanks for your time, Markus. Really, really enjoyed talking to you and thanks for giving all the insights to our listeners, right? Especially from an experienced entrepreneur is that you are learning every day and still practicing, as I think we always like to do things like rehearsing pitches, like etc. So really great to hear these kind of insights, Markus.

Magnus (41:01.906) 

Thank you very much, I loved your questions and thank you for having me on your show. 

Johan (41:06.369) 

Yeah, thanks a lot. Enjoy. I hope you jump in the water later today, but probably you do, right? If I understand you correctly. Okay, enjoy today. Okay, thanks a lot. Cheers. Bye bye. Bye bye. 

Magnus (41:10.248) 

Yes. 

Anke (41:12.131) 

Not a vet life. 

Magnus (41:16.85) 

Thank you. 

Johan (41:22.562) 

So shall we record the starting? Do you have time for it? 

Anke (41:25.45) 

Yeah, the final… yeah! Let me quickly text… yeah, I will text Ashborn that I’m a little bit later. 

Johan (41:32.401) 

That was Bjorn. Give him a regalia. 

Anke (41:34.27) 

I’m doing with him… Oh yeah… He’s asking now, great. We’re doing… I started something new, Foundry, with them. Yeah, that’s cool. They’re our partner. Given the costs that are attached to that, we can invest with them. Yeah, and it’s not that much. It’s maybe 1000 per event. 

Johan (41:46.317) 

Yes, I saw it. Nice. Yes, that’s good. 

Johan (41:54.004) 

Yeah. Yeah, yeah. They really do have to do that. Yeah, I feel fine. 

Johan (42:03.294) 

and we’ll be back in a week or so. It’s a very fine evening. 

Anke (42:04.627) 

But for us, we don’t have a lot of slack, it’s win-win. So that’s… Okay, shall we record one thing?

Johan (42:13.723) 

Very good, 

Anke (42:16.362) 

Yeah, one thing, because we didn’t explain what the product is. So if you listen, we didn’t ask, so maybe we should do that now. 

Johan (42:28.94) 

I think you can explain that. You know what it is, I think. A hardware device that you put on your crane and that just filters out all the plastics with microfilters and makes quality water from existing tap water, just crane water, filtered. 

Anke (42:33.439) 

Yeah. 

Anke (42:47.346) 

Yeah, it’s a accessory you put on your tab to get rid of the… 

Johan (42:49.889) 

So you go to… Yeah, you do. 

Yeah, with micro filtering technology, which cleans out all the micro plastics which are in the tap water. 

Johan (43:07.665) 

I thought it was only microplastics, but it filters water. I’m not sure if it’s wider, but it filters water. 

Anke (43:16.822) 

Faux set. 

Johan (43:20.282) 

shit. 

Anke (43:22.) 

Oh, they have a faulty filter. They have a spelling error on their website. Okay, yeah, this I can explain. 

Johan (43:30.029) 

Yeah, same. 

Anke (43:33.) 

Um…

Oh, we’re still recording. Yeah. 

Johan (43:35.825) 

Should I start? 

Johan (43:39.405) 

Hey Anke, we just had a great talk with Magnus sitting in his cabin in Spain, just I think between the surfing sessions that he has and while he was, and he actually did a company, right? Tapwater to the Blue Water Group. And he built a magnificent hardwrap product, right? Perhaps you can explain a little bit what he does, because I think it’s good for our listeners to understand his business, his line of business. 

Anke (44:03.114) 

Yeah, so to keep it very simple, he basically created this device that you put on your tap, your faucet tap, to get out of all the plastics so that the drinking water is super clean, so you don’t have to buy any bottled water anymore. That was his whole idea, let’s get rid of all the plastic bottles and get something clean water from your tap. 

Johan (44:32.589) 

Yeah, and this guy is a serial entrepreneur, a Swedish guy living in Spain. And of course in Spain and these kind of countries, this problem with, let’s say, clean tap water is a big issue. So he started that company. But I think fascinating, what was fascinating for me to hear is that even though he started, I think, seven companies before this, he brought a lot of, let’s say, very practical learnings to the show, right? And giving a lot of insight in how to… 

to build your team, also how to get funding, but also how to run an exit process, right? Because this guy has done it a few times already. So I think magnificent learnings on that end. 

Anke (45:04.574) 

Yeah. And I guess if you’ve done it before, it will make it easier, I think, to attract the right talent, uh, and run these processes more easily, but still, despite all the success in his past, he also had challenges in this new company, not only because it was a hardware company in a completely different market that is maybe less easier to scale. 

But also in the acquisition process, I don’t think, at least from my insights right now, like if you’ve done it a few times, it’s not really getting more easily, it’s still a lot of work. But the way he talks about it, so calm and knowing that you need to have optionality and build that up over the years. 

These are the insights that you definitely learn, I think, if you’ve done it a few times already. So incredible insights, especially for those who are doing it for the first time. 

Johan (46:01.925) 

Yeah, pretty good. Let’s dive into the show. Okay.

Anke (46:04.854) 

Good. 

Okay, still the product explanation is not quite smooth, but yeah. Okay. Yeah. 

Johan (46:11.757) 

No, it went well, I think. Very clear, very clear from Kees. And he also tells something about it, so hey, great. I think Kees, I think you’re listening with me. There are of course a few moments that we say that we actually say something that needs to be cut out of the show. So I hope, of course, from the bottom of my heart that you note that when those moments are. And a nice story, this is very inspiring, this man. Yes, right? 

Anke (46:34.934) 

Yes, I’m curious what he will do after this. 

Johan (46:39.11) 

I think this one is from the Cold Outreach. 

Anke (46:44.126) 

I’m curious what he’s going to do after this. My reading, and this shouldn’t be recorded, doesn’t seem like he wants to stay there for a long time. He really wants to do something else. But he said, I’m on the hook for the next few years. So I thought, oh, poor you. Because he wants to do something else. 

Johan (46:52.813) 

No, no, never! 

Johan (46:58.978) 

Yeah, yeah, yeah. 

Johan (47:03.45) 

Absolutely. No, ladies, it’s good to do that. By the way, maybe a learning anchor is, I do that now with, maybe we should do it like this, maybe Kiesha, is that for you too, is that we with every guest, because the nice thing is of course if we have to live, the goal of this show is of course to share the content, so also to build our network at this goal group. 

Maybe Anke and I should share that we have a pre-departure agreement with each guest. Just a quarter, half an hour. Because then we get to know these people better. That’s good for our network and that gives a warmer feeling in the show. Maybe we can share this between us. 

Anke (47:26.563) 

Yeah.

Anke (47:36.727) 

Yep. 

Anke (47:40.202) 

Have a good day! 

Johan (47:42.385) 

Yes, to do that. I had the last one with someone. And I built up a personal connection. I have a list in my telephone that when I’m in that city, I contact him. That’s good for our personal network. If we can record that in the process, then we have a call somewhere in advance to get to know that person better. And have a little more background. 

Anke (48:03.458) 

I think you’ll be able to meet them soon. These are the unique insights that this person can give to the audience. Good one! Maybe I’ll see you this afternoon. If I’m in the capital city earlier, I don’t know if you’re still at the office. I might come by. Okay, thank you Kiesha! Ciao! 

Johan (48:06.114) 

Yes. 

Johan (48:21.622) 

Yes, always welcome! Absolutely! 

Nice, cool. Great, thank you. Thank you, you can help me. Bye.