OpEx Awards 21: EMEA Large-cap winners – Cinven, Mid Europa Partners and Permira

Allegro’s private equity backers helped transform the incumbent e-commerce platform into an innovative leader in its field.

When Cinven, Mid Europa Partners and Permira acquired Allegro for €2.75 billion in early 2017, they put in place an ambitious value-creation plan to transform Poland’s largest e-commerce platform into a leading and innovative market-maker.

The plan involved more than 30 initiatives launched in parallel, including pivoting to a consumer-centric approach through the creation of a new commercial team to drive category strategies and a new customer service team. At the same time, the sponsors invested in the technology platform and its user experience by developing, for example, a new mobile app, a one-click check-out process, enhanced search and logistics solutions.

Allegro also focused on driving up customer loyalty through the launch of Allegro Smart! in 2018 – a subscription-based loyalty programme. To support these changes, the platform’s private equity backers assisted in strengthening the company’s management team and boosted headcount. Employee numbers increased from around 1,400 in 2017 to more than 2,100 in 2020.

The e-commerce platform also launched integrated distribution services and reduced its infrastructure costs in areas such as distribution and payment processing.

As a result of these expansive value-creation efforts in 2021 active buyers grew to over 13 million and the Allegro Smart! subscriber base reached more than three million, gross merchandise value growth exceeded 40 percent year-on-year and mobile penetration increased to the extent that it now accounts for over half of GMV.

3m+

Allegro Smart! subscribers

40%

Year-on-year gross merchandise value growth

€9.8bn

Implied market capitalisation at IPO

Allegro listed on the Warsaw Stock Exchange in October 2020, with an implied market cap of 44 billion zloty ($11.5 billion; €9.8 billion), making it Poland’s largest-ever IPO. The share price soared on the first day of trading, closing at 63 percent above the IPO price.

Between 2017 and 2020, the company’s revenue grew from approximately 1.6 billion zloty to 4 billion zloty and EBITDA almost doubled. Today Allegro is one of the world’s top 10 most-visited e-commerce websites.

The judging panel described the firms’ acquisition of Allegro and their bet on successfully turning around the incumbent e-commerce platform as a “bold” move. “The shareholders transformed Allegro into an innovative player by launching new solutions, expanding its product offering, investing in enhanced user experience and much more,” noted the judges.