A hundred thousand Hungarian students (and five sharks) have already been convinced – Diverzum is entering the international market.
They went from high school friends to business partners, and at 25, they run Hungary’s largest student discount network. Among the Sharks, those not among their tens of thousands of TikTok followers could also get to know Miklós László and Fanni Gyarmati. Miklós László, one of the founders of Diverzum, summed up the past seven or eight years of his career:
“One moment, we were sent out together from Biosóra, and the next moment we are appearing on TV in front of two million people.”
The fact that the South American scholarship program was not the most exciting part of Miklós’ youth also says much about this period. We talked to the two young founders in Jókai Street in Pest, in front of a random but smiling backdrop, in the former MSZP headquarters, at the former presidency level.
It works like this
Diverzum offers discounts to students through its partners. You must register on the site and prove that the user is still a student (by “presenting” the student ID). As soon as we are satisfied with this, the discounts are available: there are typically 10-25% price discounts on the site. There are very beneficial, but briefly available so-called lightning discounts too. There are brands on the site, such as Puma, Don Pepe, Ecipő, ShareNow, New Balance, Dorko, Notino, and the Bubbles laundry network – so the selection is very mixed. Diverzum is free for students; the company earns a 10% commission from its partners.
“We started the project with an electrical engineer friend, Bálint. I paid €6.53 for the domain out of my pocket, and we paid €27 monthly for the server,” said Miklós.
The founders built the domestic system based on their experiences in Northern and Western Europe. Miklós attended the University of Exeter and participated in an exchange student program in Spain. Fanni started university in Hungary and participated in an Erasmus program in Norway.
“In Western Europe, it is a rule that there is a student discount for almost everything. In Hungary, we could only meet this in museums and maybe in the Turkish restaurant before Diverzum,” said Miklós.
He was already fascinated by the stories about the startup of big tech companies when he was still in school. As a teenager, he read a biography of Steve Jobs, and at university, he scaled his ideas at startup competitions, but his entrepreneurial spirit was not enough then.
“There is a businessman in the family, but there is no entrepreneur, and there was still little entrepreneurial spirit back then. Others said it is better to start working for a big company because I can learn the ins and outs of business life and later start my own business. I interned at several multinationals but realized that being a true entrepreneur requires a completely different kind of knowledge. To build a startup, you need more determination than an idea,” he said.
Fanni’s parents are entrepreneurs, and she, too, saw this path before her in childhood. But she had to travel to Norway for the idea.
“During the exchange student program, I noticed how different Norwegian student life is from Hungarian. At first, I shared my experiences on TikTok, which reached many people, and every day I received feedback that the videos motivated them to go to Erasmus. I came home, and we started talking with Miki, who had similar experiences during this period,” she said.
Finally, in November 2021, the Hungarian student discount network, Diverzum, was launched. Miklós left his master’s degree in Amsterdam because of the business.
“It was the best decision of my life, but it was difficult for the family, and I wouldn’t encourage anyone to do it. We learned ten times more here than in any master’s program,” he said. The parents have since reconciled.
They did not ask for the investment.
In the first months, they didn’t invest more money in the business, but the word of the site started to spread among the students.
“We had no money, the site didn’t always work properly, there were hardly any brands, but despite the many problems, we received a lot of positive feedback,” recalled Fanni of the beginning. They couldn’t spend on marketing but took advantage of the Tiktok experience.
They only won €400 at their first joint startup competition; the real breakthrough had to wait until May: they returned home from the MVM Edison competition with €13,000. At the time, Miklós was still running the project as an individual entrepreneur, but joint money management was simpler in a partnership, so they founded Diverzum Europe Kft in June. MVM Future Lab would have also entered with a seed capital of €130,000, but this was not accepted.
As the site expanded, the founders found it increasingly difficult to handle the massive influx of student ID photos.
“Miki and I reviewed 55-60,000 student ID cards individually, and the photos were immediately deleted. Today, all you have to do is enter your student ID number, which we run through a central database, and from that, we know if it’s valid. We store the number, and based on this, we run the check repeatedly every six months. We also have tools to filter abuse when using discounts,” said Fanni.
Data protection is also why only students over 14 can register on the site. Younger ones should be asked for parental permission. They still reach their leading target group, the university age group.
“We feel that it is more comfortable for companies to operate the student discount with an age limit of 14.”
The Tiktok secret
Diverzum’s website is already running, but the mobile application must still be ready. For this, the founders sought an investor among the Sharks, and their story convinced Petya Balogh the most. The investor offered €5200 and a €2600 mentoring program in exchange for 7% of the company.
“If we were to contract a development company, setting up a mobile application would cost twice as much. In the case of a large company, it is one and a half times as much, but in the case of a startup, it can easily come out of that amount, or even less,” said Miklós.
At first, all the sharks would have entered Diverzum, but the founders felt their offer needed to be better. Balogh, on the other hand, saw in them what the others did not, so he reduced his offer to 7%.
“Anyone who can build new channels and engagement towards young people will be valuable to global brands that want to address their young adult, new regular customers,” according to the investor.
The other decisive aspect of why he did not let go of the hands of Diverzum was the rapid growth. Miklós and Fanni said in December that 70,000 students use the application, but by the beginning of February, the number of registrants approached one hundred thousand. The rapid spread is significant because both consciously manage their social media platforms.
“Our followers have followed our progress over the past year. We currently have two TikTok channels, one with nearly 20,000 followers and the other with 26,000 followers. We have a video that a million people have seen,” said Fanni.
In January, the traffic picked up, exceeding December by 31%. In addition to TikTok videos, they also try to draw students’ attention with marketing actions. For example, they distributed 1,500 condoms on one occasion. Later, they would also like to cooperate with Durex.
The book fair is just around the corner.
Diverzum currently cooperates with 43 brands. The 10% commission is average; there are places where it is lower.
“In the case of Munch or This is Redy, our commission is a fraction of 10%,” said Miklós. In the case of the food rescue Munch, the discount offered by the application is increased by an additional 10-15%, and brands that already offer student discounts are also included in the offer.
The average consumer usually spends €50; the most significant turnover is made through food ordering applications.
.”Regarding frequency, products with a low basket value dominate, such as shopping and ordering food. On the other hand, based on value, electronic products, and festivals take the prize,” said Miklós.
However, the largest income comes from categories with a medium basket value, such as fashion and nutritional supplements.
The students have spent €300,000 through the site so far. The food delivery and rescue sector and electronics stores are already a well-proven source for Diverzum, so further collaborations are planned in these areas. Fanni also mentions the book market, and both smile suspiciously at the mention of Líra and Alexandra.
“For these three categories, involving a partner involves the most work because, for these product categories, cooperation is more of a commercial decision than a marketing decision. Olvas.hu and Maxim Kiadó are already cooperating with us, and recently HVG Könyvek joined,” said Miklós, but he could not yet give details about the current negotiations.
The radar has crossed the border.
In Petya Balogh’s investment of €25-50,000, the fact that the two young people would set foot in other regional countries also played a prominent role. After the stabilization of the Hungarian team, they want to build a network of student discounts in other countries. Moreover, they are preparing for married life.
They assessed the coverage of e-commerce in the neighboring countries and the number of students and conducted market research.
“At the end of the summer, we will reveal which country will be the next destination. I can only say that we will remain in Central and Eastern Europe and will not merge with other companies, ” said Miklós.
The Story of SEON’s €10M Series A Funding. The venture capital firm is known for backing the biggest Euro tech success stories, such as Spotify, Klarna, and Bolt. Angels joining Series A also include founders of N26, SumUp, Tide, Onfido, and ComplyAdvantage as well as the ex-CPO of iZettle and ex-CFO of Revolut.
Largest Series A in Hungarian Startup History
Setting a new record for Hungarian companies, this €10M Series A proves that CEE startups are gaining visibility on the world stage. Companies like UIPath, Brainly, and Vinted are also brandishing the flag for the region, demonstrating that it’s possible to attract international attention even when your headquarters aren’t based in a traditional startup hub. But of course, it all starts with the quality of the product.
Strong Risk Tech as a Cornerstone
From its earliest incarnation, SEON was always about solid technology. When Tamas and Bence couldn’t find a promising risk startup to protect their crypto exchange from fraudsters, they built it themselves. The products, in short, were designed as an antidote to legacy risk companies, whose expensive integrations and outdated data analysis tools did not meet the needs of small businesses. They wanted more agile tools with better results and faster implementation. SEON and its early adopters weren’t the only ones interested. Innovative anti-fraud technology is increasingly valued by big companies too. Air France, Avis, and Patreon are now all big fans.
Focusing on the Next Steps
Closing a funding round feels both like a victory and a challenge. The stakes get higher. Business decisions become more impactful. Luckily, SEON is already a sustainable startup. But it doesn’t mean they plan on resting on their laurels. SEON has a long-term game plan and a big mission: eradicating online fraud. This is only possible thanks to all the people at the startup who work hard every day to make it happen. Growing the team and enabling their growth and that of their products to benefit customers is precisely what this investment is all about.
Including Series C funding, the innovative start-up has raised €33 million since its inception in 2015. The company will more than double its 140-strong team of parametric designers, developers, researchers, production specialists, and marketing experts to continue to push the boundaries of furniture design and technology.
Tylko, the Polish digital-first furniture company, announced today the close of a €22 million Series C funding led by Israel-based Pitango Ventures and Finnish Evli Growth Partners. Since its creation in 2015, Tylko has served almost 60,000 satisfied customers and shows no signs of slowing down. The €22m investment follows a strong year for Tylko, with its unique approach to furniture design generating a 132% increase in sales in 2020 compared to previous years.
The new investment shows confidence in Tylko’s offering of premium design coupled with a user experience that puts the customer in control. The brand’s unique business model is premised on its belief that through investment in innovation and cutting-edge technology, the furniture industry can be swayed from ‘fast furniture’ towards durable, user-first products. Tylko incorporates sustainability into high-quality and well-designed products by embedding conscious consumption in everything it makes.
Angel investors in this Series C round include Brian Walker, former CEO of furniture giant Herman Miller, who had been advising Tylko before his investment, and Mark Williamson, COO of renowned US-based online classes platform MasterClass. As part of this investment, Rami Kalish from Pitango Ventures, Mikko Kuitunen from Evli Growth Partners, and Brian Walker will join the company’s Supervisory Board.
A future-proof business model
Tylko has seen sales rise by 132% during the pandemic, as its future-proof business model adopts an online-only, direct-to-consumer (D2C) and made-to-order approach. Individually designed by the customer from home, based on parametric design principles, each item is an individual solution. From each order, Tylko’s unique proprietary software automates the manufacturing process for its production partners: a directly scalable process.
These advantages have driven the €33 million in funding that Tylko has raised.
Tylko will use the Series C capital to find the next generation of creators and talent who will help to drive the company’s mission and vision to make ever-better products through industry-leading technology and a personalized approach to design.
Mikko Kuitunen, Growth Partner at Evli Growth Partners, Founder, and CEO of Vincit. “We are impressed by Tylko’s exceptional growth and ability to scale the company as a market leader, offering new, customized solutions within the furniture market. Tylko’s strong impact-driven vision and made-to-order business model drive the market’s transition towards more sustainable solutions. We believe Tylko is positioned at the forefront of such a transition by optimizing material use, production efficiency, and offering customers unique, long-lasting design.”
€36m in sales for Tylko during the pandemic
The successful Series C funding round comes from a strong year for Tylko. With the pandemic transforming homes into workplaces, schools, and beyond, our interiors have never been more critical. Tylko’s unique offering – environmentally conscious, customizable, premium design – has struck a chord with taste-conscious and environmentally-minded consumers.
In 2020, during the first lockdown, the company saw a 40% MOM growth in trade, with sales from June to August tripling compared to the same period in 2019. Last year alone, Tylko served over 30,000 satisfied customers.
The furniture market is one of the largest consumer categories. Its online penetration was experiencing a Compound Annual Growth Rate (CAGR) of 14% before the Covid-19 pandemic, creating market potential in the future. The total furniture market size in Europe and the US in 2020 was €341.1 bn. Tylko’s sales have doubled yearly since 2015, with 2020 seeing €36m in revenue and profitability in Q4.
Rami Kalish, Managing Partner and Co-Founder at Pitango “Tylko, has a huge vision to disrupt the furniture industry that has “frozen in time” with its outstanding technology and unwavering commitment to protecting Mother Earth. We believe in Tylko because its outstanding founding team excels in all the business parameters of scale, growth, and customer satisfaction while maintaining excellence in executing an inspiring ESG and sustainability vision.”
Create customer value where sustainability and durability are the norms.
Tylko is committed to developing contemporary products that positively influence people’s lives while preventing adverse environmental effects. The furniture industry contributes heavily to the climate crisis: it is responsible for over a billion trees falling yearly, alongside 670 thousand tonnes of the landfill in the UK and 10 million tons in the US. Despite the increasing importance of climate, this trend continues to accelerate.
Jacek Majewski, Co-Founder and Co-CEO Tylko, commented on the planned expansion: “Tylko’s vision has always been about putting the user experience first, to create a product that is perfectly designed, high-quality, and sustainable. We believe that driving sustainability into this huge industry can only be done by creating highly desirable products that will win over customers by their features rather than certificates.”
Constant product rotations and disposable furniture have become the norm across the industry, with poorly sourced materials compounding the issue. Tylko wants to transform this behavior with a perfectly adjusted product to the individual’s space and needs, easy to assemble and disassemble, and a hassle-free product experience. Every item is a durable, individual solution, requiring less consumption and helping the planet.
As part of the €22 million investment, Tylko will continue to invest in Its supply chain to develop and create new sustainable and durable materials suitable for the furniture industry. It has improved delivery, packaging, and logistics processes to ensure the most efficient supply chain optimization. An expanded network of collaborators (artists, designers, brands) to reach more people. Technologies that improve Tylko’s customer experience (AR, Space Recognition, Parametric Design tools). Tylko’s ambitious investment in people
From its founding in 2015, Tylko began to create a workplace where employees can create, develop and contribute to the industry. 2021 offers an enormous opportunity to rapidly expand its team, which already includes 140 specialists, investing in the best talent in the industry.
Mikołaj Molenda, Co-Founder and Co-CEO Tylko, added: “Right now, we need to invest in the best people in the industry to work with us and achieve Tylko’s mission – to help us build the value for customers and shape the future of furniture industry. To change our outlook on our home and the interior decisions we make. We offer the freedom to think, do, change, and evolve. Come join us as we work on innovative solutions for people and the planet.”
Global expansion and new products
Additionally, the new funding will support Tylko’s further expansion into markets beyond Europe and the launch of new product categories. Currently, Tylko’s portfolio consists of the original Type01 in Plywood and Veneer and its successor, the Type02, two product families where customers can configure anything from a bookcase to a shoe rack to a TV stand.
In late 2020, Tylko introduced a new product category with a new configurator version and extra features. This illustrates how easily Tylko can expand its product portfolio:, a whole new product family can be made with further software upgrades. Further product development in this way is planned for 2021.
