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Ava & May is a Berlin-based startup developing luxury home & living products and specializing in fragrances. Founded in 2018, Ava & May has gone from strength to strength, with its successes allowing it to launch a second brand, FAYNT, in 2021 and further expand its portfolio with CLUB NOÉ. We have been lucky enough to sit down and chat with Akos Piffko, one of the three founders of Ava & May.
Akos, please tell us more about Ava & May.
My two co-founders and I have been working together in the e-commerce space for nine years; this is now our second joint project.
We employ around 85 people in Berlin, where our headquarters are located. However, the company is also active in France and Italy. For these markets, too, we have our own dedicated contact people. We always ensure that each region receives market-specific support.
What are you offering your target audience?
AVA & MAY tells the story of two globetrotters who return to Berlin on a rainy day after an adventurous year. Lighting a scented candle takes them back to their travels. In this way, our products represent various dream destinations, bringing the world into our customers' homes.
We've since broadened this concept to include 'foodie candles,' crafted to evoke specific culinary memories. These candles are about fragrance and reliving cherished moments and experiences.
Our primary target demographic is predominantly female, comprising over 90% of our audience. Initially, the audience was younger, but there's been a notable shift over the past five years. The extensive use of social media advertising has played a significant role in helping to broaden our audience. While our core demographic still centres around women aged 25 to 40, we've seen an exciting development: a rapidly expanding segment of women over 50. This indicates that our appeal is becoming more mainstream and reaching a broader, more diverse audience.
How are most of your sales generated?
Over 90 to 95% of our sales are generated through our online store, which is a testament to our effective marketing strategies and robust store system. While our online presence continues to be our main sales driver, we are actively expanding into retail and exploring various B2B avenues. We've launched campaigns with well-known partners like Zalando, Westwing, Limango, and Rossmann.
What role do you play within Ava & May?
As the Managing Director and Co-Founder, my role contains several critical areas within the company. Firstly, I oversee finance and accounting, emphasising our financing strategy and company capitalization. This includes managing investor relations and other financial aspects. In our initial years, we significantly grew through venture capital, a classic approach for our business.
Additionally, I am involved in strategic business development. This involves identifying and exploring new growth segments and untapped opportunities where we could establish a foothold. This strategic focus has led to the creation of sub-brands in our portfolio. Initially, I managed our expansion into international markets, continually looking for strategic development opportunities outside our core business.
Lastly, the third central area I handle is B2B retail listings. We've recently focused on this element and established a new department I oversee. This forms an integral part of our business strategy moving forward.
What do you put your successes down to?
I believe we’re in an excellent position. Our success is undoubtedly a blend of many factors, but if I were to pinpoint the key influences, it would be our experienced team. They bring a wealth of knowledge to the table, having encountered diverse challenges and opportunities over the last nine years. Their experience is invaluable.
Our team is incredibly passionate, young, dynamic, and genuinely dedicated to their work. Having such enthusiasm is a fundamental requirement for internal harmony and productivity.
Externally, our reputation in the market is primarily due to our commitment to product innovation. Our innovation pipeline is constantly bustling, allowing us to introduce four to five new products monthly. These range from various iterations of our core products, like scented candles and sticks, to limited edition items that quickly sell out. This approach keeps our offerings fresh and exciting for our customers.
Is there anything else that makes you stand out from your competitors?
Our product launch frequency stands out. Other companies might introduce new items every six months. We excel in product conceptualization, and our emotional storytelling approach is equally successful.
What would you say are the challenges you have faced?
Our most enduring challenge last year was ensuring sufficient cash flow to continue our key initiatives.
We were riding on a high after our successful Series A financing in 2021. We were optimistic, thinking money would quickly come by as long as we kept boosting our sales, which we were good at. Our first three years were marked by rapid growth.
But things took a sharp turn in February 2022 with the Ukraine war outbreak. It became clear that this would significantly impact the market. We had to act fast, and thankfully, our quick response was well-received by our investors. After all, we've been in this business for nine years and know it inside out.
Like many companies, we had to restructure to cut costs. This was tough because we had scaled up at the start of the year for growth. Then, suddenly, we had to scale back, which was a hard pill to swallow.
When we face liquidity issues, it’s more so because of the seasonal nature of our product – candles. Summer is always tricky since we must stock up for our busy Q4 despite the seasonal financing gap.
Then, we diversified our financing options. We were fortunate to have choices among several revenue-based financing providers. This was ideal for us, given our size and stability compared to other early-stage startups.
Working with various companies has been a strategy for us.
It's about finding a long-term partner who understands our business so we don't have to start from scratch every time. While we're open about our partners, they must be reliable and professional.
Apart from diversifying your financing – what else did you do to overcome current economic challenges?
We have realigned our strategy with an even greater focus on profitability and efficiency in our marketing efforts. This meant reducing marketing spend but improving its effectiveness. We're now more profitable and on track for consistent profitability, although seasonality still affects our monthly performance.
What sets Silvr apart from its competitors?
I appreciate our relationship with our account manager at Silvr. We were among their first clients in Germany. It's been a great experience overall.
I can see Silvr always staying a part of our financing mix.
What would you consider Silvr’s major benefits?
What I like about Silvr are its speed and simplicity. They quickly assess if you're eligible for funding and under what terms. This is a massive plus because you don't have to spend much time introducing your company, submitting tons of documents, and having endless discussions.
It's straightforward and clear. You always know where you stand with Silvr.
The major benefit, especially for early-stage companies, is securing funding from Silvr when they might not qualify elsewhere. These companies might still need to be profitable or have a long business history, making discussions with traditional banks challenging.
Silvr is particularly helpful for situations like gearing up for a financing round where you must boost your marketing spend or bridge a gap during lean periods. It's an efficient way to get funding quickly and without hassle.
What are your plans for 2024?
Currently, we're focusing on our core business, a common theme for many companies. We aim to make our business profitable and are on the right track.
We're introducing exciting innovations to combat seasonality, particularly in the summer. We've seen good progress with products like car fragrances and outdoor candles, which have performed well recently. These innovations will help us achieve a more stable performance in the summer months.
Furthermore, we're continuously working on creating efficiencies in all business areas. Expanding our customer base is crucial for us, especially in B2B retail. We're aiming for an omnichannel presence. Customers need to interact physically with products like ours.
There's still a lot of potential for us to grow.
