Project Overview

SkyWard Robotics OÜ (SkyWard Robotics) is a birch frame manufacturing company registered in January 2022 in Tallinn. The company produces components for upholstered furniture (sofas, chairs, beds) in various sizes. The raw material for the components is common birch (Betula Pendula), which is abundantly available in Estonia, Latvia, Finland, and Sweden. As the product itself (furniture frame) is a low-cost item with little added value, the demand for it is inelastic and stable and market competition is not high. SkyWard Robotics’ birch frame is used by the furniture industry in the United Kingdom, as well as furniture factories in Poland, Germany, France, and Romania. SkyWard Robotics’ end customers in the UK are local state-owned entities like nursing homes, the military, various state and municipal institutions that manufacture upholstered furniture from birch frames. Through its partners and agents in the UK, SkyWard Robotics ultimately controls over 15 percent of the company’s market. On top of that, the UK, as one of the largest countries in Europe, maintains a steady and growing demand for this type of product.

The mission of SkyWard Robotics is to offer clients high-quality wood products at a reasonable price, ensuring 100 percent utilization of the processed wood. SkyWard Robotics itself saws logs at its own sawmill in Estonia and ensures that the entire log is used, producing not only birch lumber but also firewood and birch briquettes, thus promoting the economical use of wood.

Currently, SkyWard Robotics produces a high-in-demand product on a very traditional furniture market and sees a growing demand for its raw materials from customers, especially in the UK. SkyWard Robotics’ birch frames need to be sorted at the entrance of the production line (by wood quality) and then, after processing, stacked and packaged. These tasks are performed using human labor, which is inefficient both in terms of sorting (humans tire, and the quality of sorting decreases by the end of the workday) and in terms of the volume of production for the same reason: human fatigue. The current staffing schedule (7 people working directly on the line or 56 person-hours a day) does not allow for the production of more than 300 m³ of finished product, and despite the simplicity of the operations, there are issues with defects (quality of the wood being processed, high moisture content, and dimensional accuracy). According to the company’s estimates, the robotised line would increase the production line by four times and satisfy the increasing demand from customers on SkyWard Robotics’ wood products.

For this reason, the company wants to implement robotic wood processing (by purchasing a robotic line) at its production facilities, which will help increase not only the speed of processing but also enhance both the quality and the quantity of the products we produce, while simultaneously reducing environmental impact. The use of a robotic line would allow the equipment to be used 20 hours a day or 140 hours a week, whereas the use of human labor limits equipment use to no more than 40-48 hours a week. Additionally, the use of a robotic line with laser-optical sorting would prevent the use of poor-quality wood and issues with sizes and geometry while increasing the processing speed of the wood (from the current 30-35 meters per minute to 90 meters per minute). To achieve this, SkyWard Robotics seeks financing in the amount of EUR 960,000 at 13.5% per annum and return period for 12 months. SkyWard Roboticsintends to divide the fundraising into several rounds: as part of the first round, the company intends to collect EUR 480,000 euros

Market description and size

The European Wooden Furniture market is forecast to increase by USD 108.09 billion at a CAGR of 5.56% between 2022 and 2027. The growth of the market depends on several factors such as the growth of the real estate and construction industry, the rising demand for luxury furniture, and the replacement of wood with composite. Wooden home decor has become increasingly popular due to its versatility and timeless appeal. With the rise in demand for modular and modern furniture, homeowners are turning to wooden pieces to enhance their living spaces. This trend extends beyond residential settings, as wooden furnishings are also making waves in hospitality infrastructure and modern office interiors.Frames for upholstered furniture constitute a substantial portion of this market. The furniture industry in the EU has been experiencing moderate growth in recent years, averaging around 2-3% annually. This growth is driven by factors such as economic stability, urbanization, and changing consumer preferences. Wood remains a popular choice for frame construction, accounting for approximately 60-70% of the market share. Metal frames, particularly those made from steel or aluminum, also have a significant presence, while newer materials like engineered wood composites are gaining traction due to their sustainability and cost-effectiveness. Around 30-40% of consumers in the EU prioritize sustainability when purchasing furniture. As a result, there is a growing demand for furniture components made from certified sustainable materials, such as FSC-certified wood or recycled metals.

Executive summary

SkyWard Robotics is launching the current funding in order to purchase new modern equipment and implement a new robotic wood processing line at its production facilities worth EUR 1,160,000. More specifically, the design costs amount to EUR 480,000, components cost EUR 380,000, and integration of the equipment with the robotic system costs amount to EUR 300,000. The company seeks to raise EUR 960,000 and cover the remaining EUR 200,000 from its own funds. SkyWard Robotics intends to divide the fundraising into several rounds.

Key financials

• The company projects a total cash flow of EUR 950,000 from operating activities by the end of 2024
• The company expects a total revenue from sales to be EUR 3,118,000 by the end of 2024 
• The company's net profit for 2023 amounted to EUR 166,709
• Skyward Robotics has a healthy credit history ranking according to independent aggregators of credit history information 
• Skyward Robotics forecasts a total net income of EUR 2,683,000 by the end of 2025
• The company’s total current assets by the end of 2023 totaled EUR 245,636

Collateral guarantees

Skyward Robotics is ready to provide the equipment it intends to purchase totalling EUR 1,160,000 as a collateral as well as offset its existing equipment and production capacities.