Circular business models for clothing and electronics have long proven their scalability and now generate billions in revenue. But when it comes to furniture, the equation looks completely different. Max Heino explains that furniture is the major consumer category where a comprehensive model has not yet reached the same enormous volumes, and the reason is logistics.
The biggest challenge is primarily logistics. An example that concretizes the logistical challenge: if I filled the space that the sofa in my living room takes up with used iPhones, they would be worth as much as Mjuk's entire inventory, says CEO Max Heino.
The problem lies in the fact that furniture takes up enormous space but has limited value per cubic meter, even when it comes to exclusive design classics. Mjuk's solution was to take control of the entire value chain themselves. The company inspects, cleans, photographs and stores the products before finally delivering them to the customer's home.
We learned that the hard way. Technology and processes must be in place to handle thousands of unique products efficiently. That knowledge is now one of our greatest assets and one of the reasons Keepr wanted to join forces with us, he states.
Early Mistakes and AI-Driven Efficiency
The path to a functioning business model has not been straightforward, however. Handling thousands of unique and heavy items requires millimeter precision at every stage. In the beginning, the company stumbled and underestimated the complexity of handling.
This is one of the mistakes we made in the beginning. We grew too quickly without knowing exactly what technology we needed, how the physical processes would work, where the furniture would come from and how best to sell it, says Max Heino.
To survive, they were forced to drastically cut lead times. Today, Mjuk has built its own apps for each individual step in the process. Everything from reception and condition assessment to measurement and publication now follows a strict standard.
We have developed clear frameworks for how different products are handled, so that it takes minutes instead of an hour per product. Otherwise, the unit economics do not work. AI is used extensively for pricing, product descriptions, publishing and data analysis. Today, one person can review and publish three times as many products per day as a year ago, he explains.
The Unexpected B2B Boom
Although the service initially targeted private individuals who wanted to get rid of their used furniture, a completely different customer group has grown rapidly. The furniture industry as a whole has a huge need to get rid of overstock and returns.
The demand from the furniture industry for our circular service has grown so quickly that it now accounts for about 70 to 80 percent of the inflow. This includes overstock, showroom samples and returns from partners around Europe, with a focus on the Nordic countries. Interest is already so high that we have to limit how much we receive from both companies and consumers, says Max Heino.
The fact that the B2B side has become so dominant is a perfect fit for the new partner Keepr. Their network means that surplus products and B-grade goods often come in larger batches of the same model. This means that Mjuk can photograph and publish a product once, but sell multiple copies of it, which further increases efficiency.
Sweden, the Professionals and Sweden's Most Stylish Office
Today, Sweden is one of Mjuk's two absolute main markets and accounts for a large part of all orders. Despite this, they have chosen not to build up a complex network of subsidiaries.
Sweden is one of our two main markets, and about 30 to 40 percent of all orders go there. We sell directly from the Finnish parent company, so all revenue and all costs go through it. This is a conscious choice, it is simpler and cheaper to run everything from one company and one warehouse than to build parallel structures, he states.
It is not only private individuals who are finding bargains on the platform. Because each piece of furniture is unique, it requires a specific SEO strategy based on current category and brand pages, something that has attracted a broad audience. Around 15 percent of revenue comes from professional actors, such as interior designers and companies that want to furnish circularly. Max Heino mentions a prestigious assignment as proof that the quality is top-notch.
At the end of 2024, we were one of the largest suppliers to a circular office project in Stockholm that won the award for Sweden's Most Stylish Office, he says.
Finland as an Island and the Road to Europe
With a proven business model, nearly 100,000 furniture items sold and a strategic merger with Keepr in its back pocket, Max Heino is now looking south. The goal is to conquer Europe, but geography is hindering profitable freight from Helsinki to the continent.
Logistically, Finland is basically an island. Freight works well within the Nordic countries, but when a sofa has to go to Paris, the freight cost becomes so high that many buyers refrain. To reach all of Europe, we therefore need a logistics hub on the continent and we are planning a funding round next year to build it, reveals the CEO.
Before the major European expansion gets underway in earnest, however, there is another figure that is highest on the company's agenda.
The capital we have raised so far is going towards the integration of Keepr as well as growth and development in our current markets. Profitability is our top priority in the coming year, concludes Max Heino.