Nextfour from Turku hit the headlines after signing multi-million deals for the massive US marine electronics market. Their appetite has only grown, and now they want to conquer the European and Australian markets as well.
Nextfour's two-thousand-square-meter premises in the Itäharju area of Turku house a variety of things: the lobby features a long row of screens, a driving game made for trade fairs, and next to them, 3D printers are whirring away on a new experiment. In the middle of the production area is an antenna and EMC test chamber, and beside it, materials printed with the brands of many well-known boat manufacturers are stacked neatly, ready for delivery.
Nextfour is a high-tech product development company with two main lines of business: its own marine products, which are branded for partners, and a service business that provides product development for other companies.
The premises in Itäharju are versatile, as almost everything related to the products is done there: physical hardware, electronics, software, mechanics, support systems, and also applications. About 15 percent of the company's production stays on the Finnish market, while everything else is for export.
Founded in 2007, Nextfour spent its early years finding its own direction, but the collaboration started with boat manufacturer Buster in 2015 brought marine products for the boating industry into the spotlight. It was a wise choice, as was investing in white-label products. White-label products are made without the manufacturer's brand and are tailored to the style of the desired brand.
Thanks to its high-quality white label products, Nextfour now partners with around fifty brands in the boating industry. One of the highlights is a letter of intent signed about a year ago, valued at over two million euros, with Nasdaq-listed Vision Marine Technologies.
“They were looking for a specific type of solution, and we stood out from the competition with our concept. Other manufacturers don't even have white-label products, as other players in the industry are focused only on their own brand. Our advantage is also that we offer an open software interface, while others keep their systems closed. This way, the customer can create their own user experience using our devices,” says Nextfour's CEO Niklas Öhman.
The company's marine products include the Q Experience product family, which integrates all functions needed for boating into a single screen in a new way. It moves boating towards the user experience of a car.
“We offer all the functions needed for boating on one screen: navigation, instrumentation, alarms, weather services – even an amplifier and player, as well as a connection to an app on your phone. Until now, software in the boating industry has long focused only on, for example, depth sensors, so the difference is really huge, as our device is the only one to have, among other things, a built-in mobile connection,” says Öhman.
Nextfour is now seeking strong international growth. With its marine products, the company is already the market leader in the Nordics for new boats, and next they are setting out to conquer the US market, the rest of Europe, and Australia. Nextfour has just established a new subsidiary in the US and started cooperation with distributors in markets such as the UK, Germany, France, and Poland. Öhman estimates that over the coming years, revenue will grow by about 40–50 percent annually, and in five years, it will have tripled from current levels.
“This is a volume business, and now we have a finished product whose production can be scaled up. For example, we can triple our production volumes in our current facilities in Turku, and there are also plans to potentially start contract manufacturing of our products in the US, depending on the sales volumes.”
The pace of growth and the international expansion are partly enabled by the entry of venture capital investor Verso Capital into the company a year and a half ago.
“We have been profitable throughout our entire operation, but until the last few years, we have operated on self-financing. It has been a long and slow road. We needed working capital because our own cash flow wasn't enough for such rapid growth, so a venture capital investor was the best option for us,” sums up Öhman.
Growth is also being sought by launching new products and expanding operations in the future to the consumer market as well. A significant help in launching new products will be the Visitor Centre Joki, which will be utilized for the digital launches of future novelties.
“Joki is an important partner for us in other ways too, and we make versatile use of, for example, Joki’s meeting rooms and sauna facilities for our staff’s recreation days,” says Öhman.
How to achieve growth from international markets
1. Find the right venture capital investor.
It is important that the venture capital investor shares your values and enthusiasm for your product. This way, you can move the company forward together in the long term.
2. Internationalization requires persistent work.
If you want to trade on different continents, be prepared for long working days: Australian matters are handled in the mornings, Europe during the day, and the US in the evenings.
3. Acquire diverse expertise for the company.
Our company board has experience in areas such as international trade, and our company has its own in-house lawyer.
4. Be prepared to travel a lot.
Once all important partners have been met in person at least once, it is easier to continue the cooperation via Teams.
5. Invest in language skills.
Talk about more than just work and get to know the people you work with: everyone has their own story and every company has its own passions.
The tips were provided by Nextfour's CEO Niklas Öhman and Marine Sales and Product Manager Patrik Gustafsson.