As attention to reducing carbon footprints continues to grow, the likelihood of a recession is only increasing – indeed, some believe it has already begun – many tech companies see the need to lay off workers en masse. Peerby in Amsterdam thinks he can take advantage of the current situation.
Peerby was founded ten years ago with the idea of making it easier for people to borrow things from each other. A drill, a saw or, recently, a Sinterklaas suit. “The social component is very important to us,” says BNR Business founder Daan Weddepohl. But there is a limit to that component. ‘People are willing to travel 1.99 kilometers to pick up a product. More than two kilometers seems too much to me».
The platform generates the most activity in cities with at least 50,000 inhabitants, but especially in large cities. “Within the Ring of Amsterdam, one in four people have a Peerby subscription.”
Subscriptions as a revenue model
This subscription form is a relatively new part of business operations, Weddepohl says. Where once a fee had to be paid for each shared product, people now pay a fixed company. “It feels very good and is certainly not a concession to the first concept of our company.” The product is insured for the subscription fee and both the customer and the supplier know who they are doing business with. “It is then up to the people themselves to lend the product free of charge or in any case ask for a fee”.
According to Weddepohl (41), just under half of people think that it is enough to lend a drill free of charge, for example. ‘We see forty percent borrow for free, the rest want a small fee. For example, to be able to buy a new one later.’
The company does not believe that it will be immediately affected by the possible imminent recession. It could even become an incentive. “Hopefully more people think they’d be crazy to buy something new instead of borrowing.” In this regard, Peerby sees the ingrained “buy something” habit as a bigger competitor than the construction market, where similar services are also available. ‘We have to fight against standard behavior.’
Sustainability
Besides the economic tide, there’s another sword of Damocles that could work well for Peerby, Weddepohl thinks. ‘Only now has it become mainstream to really think about the ecological footprint. Do I really need a new one or can I borrow one?’
While the company has struggled to keep its head above water despite hyped messages in its early days, Peerby recently raised more than two million euros in an investment round. This means that lenders and investors get paid right from the start. “Others received shares in the company.”
But where finding investors was relatively easy early on, companies are now more hesitant, Weddepohl says. ‘While now it is much more logical to invest in us. The income model works, we can support ourselves.’ Uncertainty within the tech world may be playing a role in this, with many big tech companies being forced to lay off large parts of their workforce. This is not the case with Peerby, ‘if we were to make a third of staff redundant, it still wouldn’t be a mass redundancy’. The company employs seven people.
In addition to investments, the Amsterdam-based firm is also looking to expand the services it can offer. “Think about loose products, things you own together. Only then will we be truly circular.’
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
