- Private equity and venture capital knowledge centre
- Fund Establishment
Livonia Partners invests in fast-growing Bagfactory, a manufacturer of non-woven and paper bags to customers across Europe. The transaction is pending Competition Council approval, and is anticipated to conclude by the beginning of this summer.
Since establishment, the founders of Bagfactory have invested heavily in developing technologies for making environmentally-friendly carrier bags. Bagfactory produces lightweight bags from recycled materials that are long-lasting and can be reused, and, at end of their lifetime, can be easily collected and recycled using the available municipal recycling points.
According to Mindaugas Utkevičius, a founding partner of Livonia Partners, the Bagfactory investment is the fourth investment for Livonia Partners Fund II: “We at Livonia are striving to forge partnerships with Baltic companies that have a strong global growth potential. We believe in businesses whose products and services have a positive impact on people’s lives and the environment, and Bagfactory is precisely that.”
According to Gvidas Krolis, the CEO and Co-Founder of Bagfactory, new investment from Livonia will allow Bagfactory to accelerate the already impressive growth of the company: “Our growth has been progressively accelerating. Last year, we manufactured 50 million multi-use environmentally–friendly bags, up from 36 million in 2021. We have customers across 23 countries and count well-known international brands among our best customers. While looking for an investor, we had a lot of interest from international investors, however, we felt the strongest synergy with Livonia. We share the same attitude towards sustainability, innovation, and business development - the main factors influencing our selection of a partner for the next stage of development.”
Gvidas believes that the upcoming years will result in significant growth for the company. Special attention will be given to closed loop circular processes including the collection, recycling, and manufacturing of materials and final products. The company will also consider the acquisition of other manufacturing and sales companies in the European Union and the United States, and the opening of new sales offices abroad.
“We not only manufacture the bags, but we also design and build the machinery to automate the production process to enable the scale and efficiency needed to compete with less sustainable market alternatives. In 2022, with scientists from Kaunas University of Technology, we created a technological solution that will allow us to be the first in the world to manufacture carrier bags in an automated manner, from 100% recycled PET bottles. We will begin manufacturing these carrier bags this year. By the middle of 2023, we will also present another, more sustainable alternative to single-use plastic bags. I believe that we have every opportunity to become competitive leaders of sustainable innovation,” said the Chairman of the Bagfactory Board and the Co-Founder, Marius Rumbinas.
Image credit: Livonia Partners; Viesturs Brolišs on Unsplash