There was also one deal this week which we have found especially interesting. Before we come to Murfy, we take the opportunity to talk about our approach.
Each week we look at what happened in the wider impact space. We love investments which have a clear and instantly recognizable impact. This might include employment opportunities for long-term unemployed persons or refugees, innovative business models in the elderly care industry or inclusive education technology.
We have more difficulties when it comes to cybersecurity awareness training companies or HR analytics software which might be labeled as impact investments. We might cover these examples from time to time to illustrate trends we see in this sector.
We also want to cover those business models which might have their roots in a social business model. Vertical farming is such an example. Who was idealistic enough to start developing urban farming ten or twenty years ago without any clear commercial options? We are not fully aware of the history of urban farming, but it seems probable that early pioneers were social enterprises.
We are also a bit concerned about the increase of the investment sizes. Social enterprises still need relatively little capital (up to €500,000 in most cases) which still does not fit with the economics of investment funds. There is a clear upward trend when it comes to investment rounds. One example is Murfy.
Murfy has raised €8 million. The Paris-based company is offering a repair service for household appliances. A repair package for devices costs €75 and includes as many interventions as necessary. It also offers very detailed tutorial on how to repair the dishwasher or the washing machine.
We have not seen the term sheet, nor do we have any special insights in the market. However, it seems safe to assume that the valuation was probably in the range of €25-40 million. We can also assume that the investors are hoping for an exit valuation of €100 million which might need sustainable EBITDA levels of €5-10 million per year. This might give an indication on the expected profitability of the company.