Thijs Verheul sold secondhand clothing community United Wardrobe to a competitor he fought against for years. Lithuanian company Vinted, valued at several billions, is taking over the Dutch business. "In such a large-scale deal, it's all about data.
Thijs Verheul, Sjuul Berden and Thijs Slijkhuis decided to throw their idea for a second-hand clothing community into the world in 2013 while studying: United Wardrobe. A bunch of friends, who had gathered the right people around them, because they couldn't write a line of code themselves. They secured a website and hoped that one day their boyhood dream would become a reality: selling their business.
'For seven years we have worked very hard on our vision, which of course involved the necessary ups and downs,' says Verheul. 'It sounds cliché, but it is a rollercoaster ride. I am proud that we succeeded, but selling your business is also an emotional farewell at the same time.'
Data deal
The buyer of United Wardrobe (30 employees, revenue unknown) is Vinted, a Lithuanian business that operates in the second-hand clothing market in Europe, is known for its TV ads with the slogan "don't use it, sell it" and was recently valued at 3.5 billion euros. Before the acquisition, United Wardrobe had some four million users. By comparison, Vinted now has about 30 million users. Although no amounts are disclosed, it is obvious to speak of a million-dollar deal.
That Dutchman Thomas Plantenga leads Lithuanian company Vinted was a nice bonus for the men of United Wardrobe, but absolutely not a condition for the sale. Verheul: "I had a click with Plantenga; he is a nice person to work with. That we share the same norms and values made us a cool cultural match, but in such a large-scale deal it's all about data. The numbers are important and Vinted had the best offer. After years of competing, it was a logical step for us to complete the sale.'
Being the candy
When asked if they consciously decided to sell, Verheul laughingly answers: "It's not that we thought: oh no, now we have to sell. Because if you are in that position, then you are too late. Of course we consciously started talking to parties, but after they had knocked on the door. We were growing fast, the figures were excellent, and then people knock on our door.
According to Verheul, it is not wise as an entrepreneur to work toward an acquisition. His knowledge and experience tells him that it is useless to think about how much your business is worth and how you want to be taken over. 'You have to focus on your business: grow the whole thing and then your valuation will grow with it. We went through three major investment rounds and were successful, but these parties came to us. You have to be the candy yourself.'
Hiring specialists
Many entrepreneurs prefer to do everything themselves. But in a sales process, Verheul says it is necessary to bring in professionals. 'Don't go muddling along yourself, because that never turns out well. As an entrepreneur, you are definitely going to get emotionally involved, which distracts from your business. Big investment rounds, selling, buying or other important matters, you better outsource those to acquisition advisors, lawyers and similar specialists.'
According to the successful entrepreneur, you don't have to do it for the cost savings either. 'Good professionals pay for themselves handsomely. We outsourced the takeover entirely to Drake Star Partners, De Roos Lawyers and Peak Capital, who managed the process excellently. We obviously knew the ins and outs, but they carried out the negotiations and advised us in the decisions to be made. Keep in mind that as an entrepreneur without experience, you are easily played, when your knowledge is not sufficient and you are high on emotions.
New chapter
By now Verheul is no longer affiliated with United Wardrobe and has been able to come to terms with the chapter. After the deal, he spent three weeks writing to put everything from the past seven years on paper, then was convinced by a friend to write a book. 'It will be a personal story for people with business ambitions: a raw story. Building a business is often seen as romantic and rosy, but ninety percent of the time you're learning and putting out fires.'
Verheul reinvests his proceeds in scale-ups, where he also likes to use his knowledge and experience as a firestarter: acting as the engine for IT projects. 'For me at the time, Raymond Spanjar of Hyves was a great inspiration and I hope to be the same for entrepreneurs. That we as students with no IT knowledge have built a successful IT business is of course a dream come true. Currently, I am also sharing this story as a guest speaker for all kinds of events and educational institutions and that is exactly what I love; that this journey has such an inspiring continuation!
