The relocation of the headquarters to Riga, Latvia involves the change of 100 people, but by the end of the year the group’s intention is to bring to Lisbon about 200 people.
When choosing the new location for its headquarters, between Germany and the Netherlands, Joom chose Portugal. Lisbon will be, from March, the headquarters of its international group e-commerce and fintech, its owner Buy Joom and Onfy or fintech Joompay. The relocation from Riga involves moving 100 people, but by the end of the year the group’s intention is to bring around 200 people to Lisbon. And there are investment plans in the national market. “Within the next ten years, we plan to invest more than 200 million euros in the local economy,” promotes IlyaShirokov, founder and CEO of Joom, to ECO Pessoa.
“Our decision to move to Lisbon was purely business. But, obviously, the war in Ukraine forced us to make this decision earlier than we had planned,” he admits. Factors such as security and the willingness of the country to invest in the sector technical weigh the choice.
“I have been to Lisbon several times and met many foreign businessmen. And it became clear to me that the local authorities are interested in developing the IT industry [Tecnologias da Informação] in Lisbon, which is undoubtedly one of the fundamental reasons that led us to decide to move to Lisbon”, justifies the CEO. It will also have helped that the country is one of the three biggest markets for Joom in Europe, having grown more than 11 times last year.
With offices in China, Hong Kong, the US, Germany and Luxembourg and around 500 employees, Joom aims to expand the business “to almost every part of the world”. Soon, it will open an office in Japan.
In mid-December, they announced their intention to sell the Joom business in Russia. Did the armed conflict influence the decision to move the headquarters to Lisbon?
We founded Joom in 2016 and since the beginning our headquarters are located in Riga, Latvia. In the beginning, we mainly worked with Chinese sellers. Then the business grew, Joom became more recognized worldwide and we had more European customers, sellers and buyers. For example, at the end of 2022, the Gross Value of Goods (GMV) of European sellers increased by 89%. The top three countries are Germany (GMV increased 18 times), Portugal (11 times) and Spain (2.5 times).
Therefore, at the beginning of 2022, before the war in Ukraine, we started thinking about opening another central office in Europe. This headquarters will become a hub for all our major European markets and allow us to enter new markets more quickly. Therefore, our decision to move to Lisbon was purely business. But apparently the war in Ukraine forced us to make this decision earlier than we had planned. In addition, the sanctions imposed on Russia since the beginning of the war definitely had an impact on our company. As a result, we had to sell our Russian business.
Why not Germany or Luxembourg, where they already have offices?
Yes, you are right, we already have an office in Berlin, ours Buy Apothecary Onfy is based there. But building a new center and relocating people is a very complicated issue. We had to take into account many factors: the country’s economy and legislation, territorial attractiveness, cost of living and many others. It goes without saying that Germany is an attractive country for many IT companies and, of course, we considered it as an option.
As for Luxembourg, it is a very popular location for startups in fintech, where we have our Joompay business. However, this country is not our first choice to open a large one central spot and to unite all our companies in one place. Therefore, we have not included Luxembourg in our list of best countries for our new headquarters. In the end, we had three countries to open our headquarters in: Germany, the Netherlands (because of its strategic convenient geographical location) and Portugal.
I have been to Lisbon several times and have met many foreign businessmen. And it became clear to me that the local authorities are interested in the development of the IT industry in Lisbon, which is undoubtedly one of the fundamental reasons that led us to decide to move to Lisbon.
To make the final decision, we considered many factors. We put a big team to work on it: the finance and tax departments and the lawyers. But, ultimately, one of the key points was the safety and comfort of our employees. Therefore, the role of HR specialists in this process was crucial for us. In summary, we looked at the following factors related to the business: investments and the economic climate of the country. clear requirements and information on obtaining a business visa and residence permit for IT companies; tax legislation and the cost and affordability of renting and maintaining offices.
In the area of HR, we focused on apartment rental costs, safe environment, level of medical care, early childhood education and cost of living.
The three countries had good opportunities and were good choices for our headquarters. But we ended up choosing Portugal. I have been to Lisbon several times and have met many foreign businessmen. And it became clear to me that the local authorities are interested in the development of the IT industry in Lisbon, which is undoubtedly one of the fundamental reasons that led us to decide to move to Lisbon.
Have you already chosen a location for the office? When to migrate?
Our new office will be ready in March and is located in the center of Lisbon, on Avenida Duque de Loulé. The office can accommodate about 100 people. By the end of this year, we plan to relocate around 200 people. We have a hybrid work culture in our company and people don’t have to come to the office every day. However, we still don’t know if we will continue in this office for 100 people or if we will look for a bigger one for next year. A bigger office is an entirely possible scenario, given that we will be hiring more people. But first we need to complete the migration process.
Which markets will be served in the short and medium term?
In 2023, we plan to expand our business to almost every part of the world. This month we announced the registration of a legal entity in Tokyo and Joom Logistics is actively attracting new Japanese customers. Soon, we will open an office in Japan and start hiring local experts.
Joompro plans to expand its operations in Brazil and explore new opportunities in Latin America. It is ours Buy Joom works intensively in Germany, Austria and Spain, and in addition, last year we started working with local sellers in India and Korea.
After Lisbon, will they be able to move on to other locations? Other cities in the country? Something in the eye?
We plan to make some nodes which will become centers for our five businesses. I find the central office building model more efficient than having many small offices in different locations. Therefore, we do not intend to open many offices in Europe or in different cities in Portugal. Instead, we want to focus all our efforts on building a strong center in Lisbon that will become a modern IT headquarters with a strong international team.
What are the business development plans for the national market?
Portugal is among the top three European markets for Joom. By coming here we can better understand the specifics of the market and focus on increasing the number of local sellers and buyers.
We want to focus all our efforts on building a strong center in Lisbon that will become a modern IT headquarters with a strong international team.
What investment does this bet require in the country?
We strongly believe that Lisbon can only benefit from having highly qualified IT specialists who will help strengthen the country’s image as a new hub for the European IT industry. In addition, over the next ten years we plan to invest more than 200 million euros in the local economy.
Portugal has moved forward with new visas for non-EU workers and digital nomads. Do you think they are powerful mechanisms to meet your recruitment needs?
A new visa for digital nomads is good for Portugal in general as it helps encourage remote workers to live and work in the country. This will also attract more IT talent and ultimately boost Lisbon’s image as a new European IT hub. This initiative was introduced very recently and it is too early to say how this will affect recruitment. Regardless, the more good professionals there are in the market, the better it will be for all companies and industries.