Smart batteries made Sweden’s Polarium the fastest growing company in the Nordic region by the Financial Times earlier this year. The company is currently on a growth journey that many entrepreneurs dream of.
– We wouldn’t have been able to run this without EKN, says Polarium founder and CEO Stefan Jansson.
Polarium manufactures smart connected lithium-ion batteries that power portable masts, and can replace many of the diesel generators and lead batteries that often power masts today.
One of our customers saves seven million liters of diesel per month using our products. If you look at the entire lifespan of mobile masts, Stefan Jansson says, it means a billion liters less diesel fuel — for the customer.
growth that costs
Since its inception in 2015, Polarium has installed more than 250,000 batteries in more than 60 countries. This year, sales are expected to reach SEK 1.25 billion. Six years later, the company has three offices in Sweden, factories in Mexico and Vietnam, sales offices in the United States and sales and technical support in England, New Zealand, Indonesia and several African countries. It’s an incredible growth journey – and it has cost a lot.
We have massive cash flow and rapid growth – add the two parameters and you’ll get an idea of our need for operating credits. This was a real challenge for us at first when we didn’t have a history to show to the lenders, plus many of them do business in the risk markets, so we turned to EKN.
Combine different guarantees
State-owned EKN exists to assist Swedish export companies and their subcontractors, through various types of guarantees. Polarium used three EKN financing solutions:
For general expansion investments, they used EKN’s operating credit guarantee, which means EKN covered 50 percent of the bank’s credit risk. This made it easier for the bank to dare to agree to Polarium’s credit needs.
For transactions in risk markets, Polarium Bank used the guarantee of a letter of credit guarantee from EKN. The bank can apply for the secured letter of credit when it has the so-called letter of credit, that is, the local bank of the buyer guarantees the payment of the seller on delivery. The guarantee of the letter of credit covers the risk of the local bank not being able to pay.
Polarium also used an EKN guarantee of accounts receivable for specific transactions, which covers the risk of the buyer not being able to pay the bill. With the help of escrow, Polarium can also go to their bank and get the bill paid in advance, which means they can offer customer credit without having to wait for payment to be made.
Reduce risk and free up capital
We do a lot of business in risk markets so it is reassuring to be able to discount both political risk and currency risk. In addition, we were able to free up capital with the help of these guarantees. Stefan Jansson says that the collaboration with EKN means we can focus on our core operations, and it has been incredibly valuable to us.
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