European e-commerce scaleup Dwarfs attracts €30 million in debt financing to accelerate its growth

The capital raised will be used to finance four new acquisitions, as well as future  investment opportunities  

Amsterdam, the Netherlands – 2 September 2021 | E-commerce scaleup Dwarfs (Dwarfs.io)  has reached an agreement with European Special Situations investor North Wall Capital to provide  €30 million debt financing from the firm’s dedicated e-commerce lending strategy. The total  funding will be used to finance new acquisitions, including the immediate completion of the  acquisition of four online stores in the lifestyle and home furnishing sectors.  

Capitalising on strong momentum in the e-commerce market, Dwarfs is experiencing rapid growth  and, in addition to the €30 million acquisition credit facility secured from North Wall Capital, the  Company is looking to secure further additional equity capital from investors over the course of  September 2021. One of the aims of this funding round is to help fund a number of additional  already-identified significant acquisitions that, if successfully completed, will triple Dwarfs’ revenue  to around €35 million. Dwarfs is also in the process of raising a larger Series B funding round in  addition to the ongoing capital raise, consisting of both equity and debt, by the end of 2021 to  further drive the Company’s expansion.  

With the availability of the €30 million in financing, Dwarfs will complete the already signed  agreements to acquire four online stores: Slaapkalm (weighted blankets; founded 2019, operating in  NL), Calmzy (weighted blankets and bedroom accessories, founded 2019, operating in NL), Litollo (pregnancy pillows, founded 2019, operating in NL) and Kristie’s Kitchen (cutting boards and splatter  screens; founded 2018, operating in NL, UK, Germany and the USA).  

In May 2021, Dwarfs announced that in the years ahead it plans to acquire c. 20 online stores, both  domestically and internationally, with revenues ranging from €500,000 to €20 million. Together with  the online kitchen store AMCO, which was acquired in May 2021, the Company’s annual revenue is  €11 million, following five completed acquisitions. 

Dwarfs CEO Demian Beenakker is delighted with the purchase of the promising online stores: “These  are relatively young companies with a strong portfolio of niche products in lifestyle and home  furnishings. Each of them has grown rapidly in its own way in less than three years and three of the  four online stores still operate only in the Netherlands. Our know-how and clout will enable us to  help them grow quickly on the international stage and allow the revenues to multiply, while the  fourth already operates across multiple geographies.”  

Beenakker also says that Dwarfs has revised its growth prospects upwards: “There are many e commerce companies in operation and we can make acquisitions faster than expected. At the same  time, capital markets, especially in the UK and North America, are showing great interest in financing  our activities and providing extra capital. On top of this we are really happy with the way our  organisation is growing. We have been successful in attracting good people to Dwarfs who will  ensure that in the long run, we can integrate the acquired activities effectively and grow them  rapidly.” 

Fabian Chrobog, Founder and Chief Investment Officer at North Wall Capital, added: “We are pleased  to be partnering with Dwarfs, which has significant geographic and sector expertise, to support the  Company as it enters the next phase of its development. Our recently launched dedicated e commerce lending strategy demonstrates the strength of our conviction in the growth potential of  this market, working with companies like Dwarfs to capitalise on the ongoing transition of retail sales  to online marketplaces.”  

IMPROVED Corporate Finance, an independent technology-focused M&A boutique located in  Amsterdam, advised Dwarfs in securing the acquisition credit facility. 

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