Alexander Hjertström answers from a living room in Australia, somewhere on the border between New South Wales and Queensland. He notes that if there's anything good about Sweden, it's the connectivity. The internet is shakier in other parts of the world.
I ask if he's running the company from Australia this time? The answer is no. Alexander Hjertström is on the other side of the world visiting his wife's family. Sweden is the base for this corporate journey as well.
However, it's not entirely far-fetched to think that a company working to help people breathe cleaner air would fit well in a market with a thin ozone layer. And I'm not entirely wrong.
"Sweden and Scandinavia have never even been a market for us; we aim mega-globally. The USA is our largest market, but we target the whole world."
From Super Profit to Bankruptcy
We go back to where it all started. Airinum was founded in 2015 with the vision of combating health problems stemming from climate changes. The tool became advanced face masks, and the company grew according to plan – until the pandemic. Suddenly, Hollywood celebrities like Gwyneth Paltrow, Ben Affleck, and Matt Damon were seen wearing the Swedes' masks. It was an optimal product-market fit.
But as the demand for the product skyrocketed, the market, with everything happening during the coronavirus pandemic, was difficult to navigate.
A troubled world led to higher manufacturing costs, freight prices soared, regulations were updated, and health recommendations from organizations and authorities changed rapidly.
And suddenly, everyone began to manufacture and sell face masks.
Airinum also needed to raise more capital to continue growing and was, according to the founders, "dizzyingly close" several times – but no investments came, and the company faced liquidity problems. Problems that ended in bankruptcy.
On January 11, 2023, Breakit published an article titled Skyrocketed during the pandemic – now Airinum is going bankrupt: 'Extremely sad'. During the pandemic year 2020, Airinum had a turnover of 122.5 million kronor with a profit of 28 million. An increase from the year before by almost 900 percent. In 2021, the figures suddenly turned the other way, with revenue dropping to just over 80 million kronor, and the profit/loss line showed red figures with an operating loss of 30.6 million kronor. Then came the bankruptcy at the beginning of 2023 – the company had gone from success to bankruptcy in two years.
The story of Airinum could have ended there. But just a few months later, news came that one of the founders, Alexander Hjertström, had bought up the bankruptcy estate. Airinum had been given a new life, this time under the company Astir Impact. Together with the company's former chief strategist Andreas Valdmaa and his brother Isac Hjertström, Alexander had decided to go for it again.
Now, almost a year since the last headline on Breakit, we meet again.
What has happened since last time?
"After we filed for bankruptcy in January 2023, there were two months of uncertainty as we worked alongside the bankruptcy administrator. We started a new company and bought back the assets. There were eight years of hard work, sweat, and tears behind it," says Alexander Hjertström.
"What had happened were strategic missteps amidst significant changing macro conditions. So, I knew that there was still a much stronger value in the company. But then, in April 2023, we had more or less signed the transfer agreement and hadn't really gotten started. I'll be honest that it was a fine balance between courage and recklessness. But in April, we could start looking forward."
Deciding to buy up the bankruptcy estate in the winter of 2023 wasn't obvious, but it came fairly quickly.
"First, I was despondent and a bit crushed. We were sort of at the top. We were the second fastest-growing company after Dynamic Code in 2020. We made an EBITDA result of about 45 million kronor in 2020. And you can imagine the discussions we had then with potential sales processes."
"We were almost at the goal of building this extremely fine company. And then it went bankrupt."
What made you dare to start over?
"If a good owner had come along and picked up the bankruptcy estate directly, it probably would have been so. In this case, it was rather that some wanted to buy certain parts. Then I felt that there was too much potential. Had I not seen that, I wouldn't have invested again. It's a huge risk to go in as CEO and owner and try again. What happens if it goes under again? What does that look like? What happens mentally?"
He describes how he and his co-founders started by repairing all relationships.
"We had continued to drive the business throughout the bankruptcy, so on the customer side, there were no oddities. But there were relationships with suppliers who hadn't been paid, or only got information from the bankruptcy administrator and not directly from us. And where there were obviously debts."
"Take our logistics partners as an example, those who sit on warehouses with our products and help us send around. Coming back to them two months later and saying now we're going, clean slate."
How was it then, the first talk?
"Nervous, we didn't know if they would be angry and perhaps not want to work with us again. But we were well-prepared. We are completely dependent on them. We tried to provide some background and seek understanding for what had happened. And then to show our commitment going forward. That we genuinely chose to invest again."
"It took a couple of meetings, and then we got most of them on board, not all. Enough so that there were no problems in the machinery. But we had to, for example, accept shorter payment terms."
The new team with Alexander Hjertström, Isac Hjertström, and Andreas Valdmaa stands without the former co-founder Fredrik Kempe, who chose to leave just before the bankruptcy was a fact.
What is your relationship like today?
"It's good. He was, just like me, disappointed with the whole situation. But he has moved on. He had already started his new company Prossioni (which focuses on premium bedding, noted by Breakit.) so he was already fully committed to that. But he gave us the thumbs up to try again."
In the new company Astir Impact, two of the board members from Airinum are also involved, Anders Andreen, former CEO of Urbanista, and Stefan Fragner, who has been CEO of Happy Socks and is now one of the CEOs at Understatement.
So, it's the five of you running it now?
"Yes, exactly. Then we also bought up our subsidiary in China where we have employees. We bought everything. Isac and Andreas were not founders of Airinum but were early employees who believed in the concept and wanted to push forward."
After you rebuilt trust and sorted out the legal issues, what happened then?
"Then trading started to pick up. We have always had a high degree of returning customers and a global infrastructure. So it was just a matter of getting that going again. Setting up new marketing accounts. Starting to send out emails and get sales up."
He says that right from day one, they had a major focus on the cost side.
"How can we optimize this operation? How can we ensure we can steer towards profitability. Much more under control."It was the founders themselves who injected the new capital, without bringing in any external investors.
"We scraped together as much as we could. Which wasn't much, to be honest. We founders, along with Stefan and Anders on the board, managed to gather enough to set up the new company. So it was a friends and family round to gather some marketing capital and such. But we haven't brought in any institutional investors."
The first year with the new company has just closed. The financial statements aren't completely finalized, but according to Alexander Hjertström, revenue landed between 6 to 10 million kronor from taking over the business from the bankruptcy estate in the spring of 2023 to December that same year.
What does the result look like?
"Between a couple hundred thousand and one million. It's not a super result. We've evidently managed to turn the company around and got it to start growing with an underlying profitability. That's how we want to work, liquidity is more important than the result."
When Airinum was at its largest, it had over 40 employees; today, they are four plus a bunch of consultants.
"We're trying to be more progressive, automate with AI, and new processes. We're steering a global e-commerce company that we could spin four times as fast without needing to be more people."
What are you aiming for in terms of revenue for 2024?
"Somewhere between 20 and 30 million and profitable we believe is realistic. But it depends very much on how the launch of new products goes. But we don't want to organically be at 10-12 million. We want to make even more impact, and we do that by getting bigger."
Focus moving forward: saving people from poor air quality
With the new company, the founders want to move away from the image of just being a mask company – even if the masks continue to be an important product.
"We've built up a very strong brand within what we call climate health tech. What are people suffering from because of climate changes? And what solutions can we come up with? We've become somewhat specialists within filter technology, and it's within that track we want to expand."
He says one of the reasons they chose to try again is because they want to do more.
"Our bet with this purchase is to come out with new products. Masks in all their glory, but that's a pretty big market and there we've proven that we're still doing well. But obviously, the mask became very synonymous with covid. We grew because of covid but we also went under a bit because of covid."
"Before the bankruptcy, we had quite a few exciting products in the pipeline. That's what we were going to raise money for. So now, in a few weeks, we'll launch our first new product within purification technology. It's crucial that Airinum can be associated with the technology, and not just the masks."
Are they still consumer-close products?
"They are portable and personal. And we're starting to sniff a bit at corporate wellness. Airinum is not about air pollution in Delhi or Beijing anymore. Rather it's about how we can make people feel better. So that one is more alert at work."
How do you view the competition?
"It has quickly become bigger and I think that's to our advantage. This whole health trend has gone a bit to the extreme. People want to optimize their health. And that's where I think we can do more with our brand. Portable and personal. There's the gap in the market."
Can you hint at what kind of products are coming out soon?
"A new variant of an air purifier, a personal one. A bit on the go."
Now I'm imagining a population walking around with oxygen masks?
"It's not a mask, it's nothing you wear. It's rather something you bring with you."
Last time you went heavy with famous profiles. Will you do the same type of marketing again?
"Yes, that's how we got big. These days we will launch a mask with the famous Norwegian DJ Alan Walker, Norway's Avicii. He's big in the target group of 15-20 year-olds, with 50 million followers on Youtube. He uses a mask when he performs."
How much do you think about impact during production? You are producing a physical product?
"The production is mainly in China. We have a subsidiary with employees who are in the factory, so we have eyes on the ground. With that said, we produce and send physical products. So that's not where we make the most difference, we're not the most optimized supply chain. We try to keep an eye on our footprint but where we make a bigger difference is that we educate about the climate crisis, what to consider to live more sustainably. But as long as we produce physical products, we're not climate negative."
"So that people here and now can continue to live with cleaner air, but then it's also about the footprints we set forward?"
"Yes, you're absolutely right. But we have a vision that when we have succeeded, Airinum shouldn't need to exist, then the world will be clean."
Acquisition as the next step to accelerate
The founders, however, have not been scared off by making a rapid growth journey. They want it to go fast again, but in a different way.
"I have a lot of respect for people who dare to bet on one. We've disappointed our investors, I'm aware of that. It's not that I'm completely calloused and just think that venture capital should be burned. Not at all, rather the opposite. Especially now when you've seen your investors in the eye. Those who thought they were going to get a super return. And then it didn't turn out that way. It feels very tough."
"But at the same time, one must be somewhat rational. We were and are a growth company dealing with innovations. It costs capital to do something new."
He uses the metaphor that "a car needs fuel" – but the question is, of what kind?
"I'm considering whether one really needs to go through the traditional investment ladder. We've shown that we can build this company. But without capital, there's a clear limitation on how much we can grow as a hardware company. So, one alternative is if we could find a partnership. Either with some financial actor, possibly a strategic partner where one can unlock synergies."
"Now that interest rates are starting to decrease a bit, we might see more consolidation in the market where larger companies acquire smaller ones. Or merge. It's damn destructive to have companies that are fine, which have a proven business model but maybe haven't quite got financing, go under."
So there is the plan for 2024 – to find a buyer.
"We would be open to sailing into a larger harbor. And then it's clear that we must be able to offer something. But we also want to be able to achieve a faster scaling together with a partner than what we could by just bringing in money and building everything ourselves. Say someone who, within our industry, like Nike, Dyson. Someone who would think that we can create value in their portfolio."
How far have you come in the discussions?
"There's no structured process ongoing, but we've started some threads and will work quite hard on it in 2024. But there's no rush, it has to feel right."
"Now we know we're playing with high risk"
As the clock approaches 7 pm in Australia and it's time to wrap up, I've been given a lecture on impact and clean air (while simultaneously downing a cup of black coffee and topping up with nicotine under the lip – Alexander Hjertström says he "was the same a few years ago). But what message does he want to send to entrepreneurs in crisis who might have just been forced to throw in the towel?
"When you're in it as an entrepreneur, it becomes very much about burying your head in the sand, focusing on the details and the here and now. You don't have time to think and sometimes you forget why you're doing this – what was the purpose from the beginning? Where are the values? That's what we focused on when we analyzed the whole journey with Airinum afterward."
He also emphasizes the other part, how you choose to run your company.
"Often you wait too long to make decisions. We're much more pragmatic this time, we were naive last time – didn't think we could fail. Now we know we're playing with high risk. We know it might not work this time either, so let's put that on the table directly. It means we come to decisions much faster. And that we're much more data-driven and rely less on gut feeling."
Are you a better entrepreneur today than you were four years ago?
"I learned more from the last two tough years with the bankruptcy than the years when everything went smoothly. Not just as a company leader and entrepreneur but also as a person. Everything went to hell, it was failure after failure and felt like the world was throwing challenges at one. But that's when you develop."
He continues:
"Not everyone may need to buy up their bankruptcy estate, but don't give up on your entrepreneurial dreams. This isn't the last company I start, there might be another one that will go bankrupt in the future, but sometime it will work. And as long as one is driven by creating value and innovation, I believe it will turn out well eventually."