Organic Growth and New Market Prospects: Development Strategies for AUTODOC in the Short and Long Term

AUTODOC was founded in 2008 and has 5000+ employees in over 27 European countries. It is a German online retailer dealing in automotive parts with a focus on making mobility quite easy and sustainable. AUTODOC is the largest company with more than 7.4m active customers around the world. Here, we shall discuss the upcoming development strategies both long-term and short-term for its strategic growth.

Opportunistic Growth Strategy

The CEO, Dmitry Zadorozhny, has confirmed to Mergermarket that AUTODOC is ready to make any acquisitions to solidify the current offering. This has opened gates for the firm to emphasize acquiring different targets that may boost the company revenue and offerings in the B2B sector as well as put in its existing toolset.

Keeping the main goal of organic growth in mind, this will be a strategic move towards excellent growth. However, the potential target size will highly rely on how remarkable the opportunity is and if the deal value comprises quite some million euros as per Lennart Schmidt (CFO). He shared that company size would never be an issue but the kind of added value it brings to the table.

As of now, AUTODOC is not looking for any acquisitions and has never gone further with any potential targets for acquisition. In 2023, the company held a net revenue of higher than 1.3bn EUR with a more than 10% adjusted EBITDA margin.

In the long term, the company will explore new opportunities for expansion into new markets. The CFO believes the US has a great market but is quite difficult to venture into and is currently not in its expansion profile.

New Milestone: On 24th April, AUTODOC announced having gained an investment as a minority stake at the  EUR 2.3bn equity valuation from Apollo funds as well as leading institutional investors. However, the investment size was undisclosed with the share ranging more than a hundred million euros.

A Change In The Business Model

Not just this, AUTODOC is fully equipped to make the transition to the service model from a sole goods-selling company model. The efforts in this direction began quite early in November 2022, when the company kickstarted AUTODOC PRO which presented the firm’s first offer for only B2B clients. It was started in France and will soon branch out to Germany and Benelux. The B2B sector is showing strong growth which currently accounts for quite a low percentage of just 1% of revenues. The company plans to work in this direction this year.

Since the future plans for AUTODOC PRO are to spread its wings in further countries, the company has now started focusing on the B2C sector as well. This is to help Consumers replace any automotive parts on their own. The CEO shared that the firm is now prioritizing efforts to serve clients who seek garage assistance for any part installation by booking an appointment at any of the nearest garages. AUTODOC is ready to address the issue of high markup that is charged on different parts ordered in garages.

Since private companies account for 1/5th of total revenue, the company has plans to grow the range further in the long term. In Europe, online sales stand at just 10% of the automotive aftermarket with AUTODOC being the largest online seller. So, the brand will leverage the power of digitalization of the automotive industry independently to drive more growth prospects.

Leveraging the power of IPO

The company is looking forward to preparing itself for an IPO. The company tried to plan for the IPO in 2021 but the process was hindered as the market turned volatile. This caused the company to miss the window. However, there is no active process in place and there are no banks appointed for it. The company will assess its situation and then progress forward with the IPO.

When it comes to the performance aspect, the company is totally deft-free and enjoys a solid cash flow. Moreover, it has been growing with an average growth rate of 26% over the last five years.

The company considers an IPO as an opportunity to further increase the overall brand awareness in the market and grab new financial opportunities. It wants to wait for the correct time so that the capital market is ready and it can enjoy the perks of a flourishing market with its IPO strategy.