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Undandy: the first Portuguese company on Crowdcube

By Crowdcube. 15th Nov 2018


We’re happy to announce that our first Portuguese company on Crowdcube, Undandy, is already open for investment. Crowdcube investors will now have the opportunity to be a part of one of the best-known Portuguese startups. This launch comes one month after we hit another major international milestone:€20 million raised for Spanish businesses.

Dedicated to the craft of custom-made shoes, Undandy has sold over 22,000 shoes in 3 years, and has already received widespread international media coverage in the Financial Times, Forbes, Business Insider and similar publications.

We spoke to Undandy's CEO, Rafic Daud, to find out more about the company, their raise on Crowdcube, and plans for the future.


What makes Undandy different from other shoe brands?

At Undandy we offer our customers the possibility to design their very own shoes, right down to the smallest detail. From the style, decoration, choice of leathers, stitching, and even the sole, there are no limits when it comes to the shoes you can design using our online 3D customiser, aside from imagination! The shoes are then handcrafted to order in our workshop in Portugal in just two weeks and delivered worldwide. The ultimate form of luxury is having something completely exclusive, and there’s no better way to achieve that than by actually designing your own product.

Why is it a good investment opportunity?

When Undandy started no-one in the market was offering custom-made dress shoes for men. Over the last two years we have been able to acquire knowledge that not only has allowed us to jump revenue from €300k to almost €2 million, with €4 million estimated this year, but also in that time we have seen just how truly scalable this business is. Our product clearly resonates with the customer, as in just 2 years we have achieved a repurchase rate of over 40% which is perhaps the ultimate validation of a product. We’ve sold to over 130 countries, so our total addressable market is limitless. We are selling exclusively online and to anywhere in the world.

With the brand equity we have grown in just three years, we hope that Undandy will not only become a very sustainable company, but we are also aiming to become a very profitable one to boot (excuse the shoe pun). Our limitation thus far has been production capability and capacity. During this time we have also been able to spot the areas we know we can improve substantially. By acquiring our current manufacturer, we’ll be able to shorten the crafting time of the shoes, and improve flexibility with launching new models, new leathers etc. This alone will enhance our business metrics.

What will you do with the funds raised from this campaign?

The majority of the funds will be dedicated to acquiring our current manufacturer and becoming fully vertical. We will then be able to ensure that our customer’s journey with us is tailor-made, from start to finish.

Who do you market your products to?

Our biggest market currently is the United States, followed by the UK, Canada, Australia and the United Arab Emirates. These are typically all very diverse markets, but the cool thing about Undandy is that the customisable element allows us to cater to all, as the design is unique to each and every customer. Going back to the core of Undandy, we’re offering customers the ability to express themselves through their shoes, with no seasonal or style limits as with traditional footwear e-tailors.


Do you plan to sell in physical stores or third-party websites?

Currently, our only channel for sale is exclusively through our website. As a result of our direct to customer approach (cutting out the middleman), we are able to give an honest price to our customers. Therefore, we don’t have a lot of margin to sell in retail stores or through third party sites. But the real question is:why would we want to? The way consumer habits have changed in the last ten to twenty years has shifted dramatically, and increasingly more people are making most of their purchases online. At the Financial Times luxury summit held in Lisbon in 2017, Yoox Net-a-Porter CEO Federico Marchetti, during his talk of NAP’s success, was asked a question regarding the company moving into retail stores with, ‘Retail stores? What for?’ And I couldn’t agree more.

What’s your sales volume at the moment and the resulting revenue?

In our case, our sales volume is extremely similar to our revenue because our return rate is very low, so it's less than 5% difference to our actual revenue. Here our sales volume near equals revenue.

How do you deal with returns and what’s the financial impact?

Only 8% of our customers actually return their shoes. Pre-existing inspiration designs on the site that are returned can then be resold, the ones that are custom made we try to use stock offs, and local markets to then sell these on. Luckily it's only a very small number of shoes that cannot be resold, which has a minor impact on our bottom line.

How do you see the company in the next five years?

We’ll continue to grow vertically, selling more shoes and acquiring the manufacturer will allow us to scale even further, at a faster rate and more efficiently. I also see Undandy expanding horizontally into other product categories. We just recently started selling socks and other leather goods, such as backpacks, holdalls, travel accessories and so on, and we want to slowly expand our brand into other categories, without losing our focus on true craftsmanship. We believe this should be present in every single product we sell. As the brand identity strengthens and keeps growing, I hope that Undandy will become a reference in the lifestyle arena for the modern gentleman.

What’s the most likely exit for investors?

Digitally native vertical brands (DNVB) have been drawn to the investors’ attention in the last few years. We had a period where e-commerce was very much in play, then following this we found that e-commerce sites had very razor thin margins, unless you’re a market domineer such as Amazon. This, in turn, has made e-commerce in its vast majority fairly unsustainable. Only recently DNVBs started taking on a different type of identity, whereby they don’t play by the same rules as the e-commerce. Margins and P&Ls look different, and ultimately we’re now building brands. The fact that we’re selling online is just a distribution channel that just makes sense in the modern climate. The DNVB market is really booming right now with M&As. The greatest thing we have as a potential return (along with other scenario exits) is dividends, as we are building a sustainable business model, whereby we plan to be cash flow positive.

Find out more and invest by visiting the Undandy pitch page.

Investments of this nature carry risks to your capital. Please Invest Aware.

Risk warning

Investing in start-ups and early-stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. Crowdcube is targeted exclusively at investors who are sufficiently sophisticated to understand these risks and make their own investment decisions. You will only be able to invest via Crowdcube once you are registered as sufficiently sophisticated. Please click here to read the full Risk Warning.

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Investment opportunities are not offers to the public and investors must be eligible Crowdcube members. Please seek independent advice as required as Crowdcube does not give investment or tax advice.