Verdane backs Ikea-founded circular economy furniture subscription business

Nornorm, which has raised €110m from investors including Verdane's Idun impact fund, bases its business model on redeploying office furniture to reduce waste.

Red chairs around tables in an office
Nornorm: A range of office furniture

Reuse, rather than recycle: it’s more economically scalable, says Erik Osmundsen, a partner at Verdane. Osmundsen has just inked a circular economy deal from the firm’s €300 million impact fund.

The company in question, Nornorm, operates a subscription service for office furniture and aims to reduce furniture wastage by extending the lifetime of furniture by 3x.

Verdane co-led a €110 million fundraising round alongside Inter Ikea Group – the holding company that franchises Ikea and a co-founder of Nornorm – and Philian Invest, a family office. Verdane acquired a stake of “more than 20 percent” in Nornorm, a source familiar with the deal told New Private Markets. Verdane closed Idun I, an Article 9 fund and the firm’s first impact fund, in January, tying 10 percent of its carry to achieving impact KPIs.

Verdane has been scanning the market for a circular economy opportunity, Osmundsen tells New Private Markets. Nornorm stood out because it focuses on extending the useful life of products rather than recycling products – the latter of which is less profitable and less scalable, says Osmundsen.

He speaks from experience: from 2012 to 2021, he was chief executive of Norwegian waste and recycling management company Norsk Gjenvinning, which was backed by Summa Equity’s first fund.

Nornorm’s turnover has seen a 20 percent month-on-month growth, says Osmundsen. With the uncertain macroeconomic environment prompting many companies to pause their expansion plans, and demand for office space remaining low, is he concerned about Nornorm’s growth? “That’s always a concern,” says Osmundsen. But in an economic downturn, “businesses would prefer to rent than to buy”.

In Nornorm’s subscription model, businesses rent furniture for €3 a month per square metre of furniture floor space, regardless of the type of furniture used. For example, a chair takes up one square metre, so it would cost €36 a year. This is much less than replacing a product every five or seven years, as businesses typically do, says Osmundsen. Despite these low rental prices, Nornorm will derive its profit margin from keeping its products in use for around 20 years, says Osmundsen.

The company stocks 25 “high-turnover” products such as desks and chairs in a “classic Nordic design” with three colour schemes so items can be redeployed without falling out of style, says Osmundsen. Among the company’s clients are Volvo, Electrolux, Castellum, IWG, Wolt, Miro, Edge and Netflix, according to a statement from Verdane.