Turku-based Nextfour 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 premises, covering a couple of thousand square meters in the Itäharju area of Turku, hide a variety of things: the lobby features a long row of screens, a driving simulator made for trade fairs, and next to them, 3D printers are whirring away on a new experiment. In the middle of the production facilities is an antenna and EMC measurement 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 that are branded for partners, and a service business that involves product development for other companies.
The facilities in Itäharju are versatile, as almost everything related to the products is done there: physical devices, electronics, software, mechanics, support systems, and also applications. About 15 percent of the company's production remains for the Finnish market; everything else goes for export.
Founded in 2007, Nextfour spent its early years finding its way, but a partnership started in 2015 with boat manufacturer Buster brought marine products for the boating industry to the center stage. 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 marine industry brands. A cherry on top is the letter of intent signed about a year ago, worth over two million euros, with Nasdaq-listed Vision Marine Technologies.
– They were looking for a specific type of solution and we stood out from our competitors with our concept. Other manufacturers do not even have white label products, as other industry players 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 CEO Niklas Öhman.
The company's marine products include the Q Experience product family, which integrates all functions needed for boating into one screen in a new way. It brings the boating experience closer to that of a car.
– We offer all the functions needed for boating in one screen: navigation, instruments, alarms, weather services – even an amplifier and player, and a connection to the phone application. Until now, software in the boat industry has long been focused only on depth sensors, for example, so the difference is really big when our device is the only one to have, among other things, a built-in mobile connection, says Öhman.
Nextfour is now seeking strong growth globally. The company is already the Nordic market leader with its marine products for new boats, and next it is 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 the current level.
– This is a volume business, and now we have a finished product whose production can be scaled up. We can, for example, triple production volumes in our current facilities in Turku, and there are also plans to potentially start contract manufacturing of our products in the United States, depending on the sales volumes.
The pace of growth and the international conquest are partly made possible by the entry of venture capital firm Verso Capital into the company a year and a half ago.
– We have been profitable throughout our operations, but until recent years, we have operated on internal funding. It has been a long and slow road. We needed working capital when our own cash flow was not enough for such rapid growth, so a venture capitalist was the best option for us, sums up Öhman.
Growth is also sought by launching new products and expanding operations to consumer markets in the future. Significant help in launching new products will be the Joki Visitor Centre, which will be utilized in the digital launches of upcoming novelties.
– Joki is an important partner for us in other ways, too, and we make versatile use of, among other things, Joki's meeting rooms and sauna facilities for our staff's recreation days, Öhman says.
How to achieve growth from international markets
1. Find the right venture capitalist.
It is important that the venture capitalist shares the same value base and enthusiasm for your product. This way, you can move the company forward long-term together.
2. Internationalization requires persistent work.
If you want to do business on different continents, be prepared for long working days: Australian matters are handled in the mornings, Europe during the day, and the USA in the evenings.
3. Acquire versatile expertise for the company.
Our company board has experience in areas such as international trade, and we have our own in-house lawyer.
4. Be prepared to travel a lot.
Once all key partners have been met in person at least once, it is easier to continue the cooperation on 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 CEO Niklas Öhman and Marine Sales and Product Manager Patrik Gustafsson.