VALO - ”We create spaces you never want to leave”

Profile

Company Data 

Company history

VALO Hotel & Work dual-use concept was conceived in 2015 when entrepreneur and frequent traveller Tommi Saari had an epiphany: hotel environments could just as well work as work environments. The idea was by no means a random event, but the logical conclusion of years of innovation work at SSA Group, and the experience Tommi, Hannu Holma and Janne Riihimäki had built in their previous businesses. SSA Group had successfully developed concepts for small apartments and pioneered Finnish apartment concepts based on exceedingly efficient use of floor space and levels.

The idea became reality and the building project of VALO Hotel & Work Helsinki was kicked off in early 2018. The flagship VALO Hotel & Work Helsinki opened on the 1st of September 2020 and set a new standard for combining workspaces and hotels. The time around the opening was sadly affected by the COVID-19 pandemics slowing down the start a bit. Even so, the period with heavy restrictions allowed VALO Hotel & Work Helsinki to thoroughly test drive the operations of a brand-new building and concept.

Today, VALO Hotel & Work Helsinki is operated by a team of 70 service-minded multi-talents eager to grow further with VALO. Since the slow months with COVID-19 driven restrictions, VALO has grown almost linearly since the beginning of 2022. In August 2022, the monthly revenue generated from VALO Hotel & Work Helsinki exceeded one million euros. The total revenue of VALO Group Oy from FY 2022 is expected to reach €10M and €15,5M in FY 2023. The EBITDA is expected to turn positive during the first half of FY 2023. With VALO Hotel & Work Helsinki and the upcoming new facilities, the management expects the revenue of VALO Group Oy to grow to €70,9M by FY 2026.

The services

VALO Hotel & Work brings together hotel and business premises that use the same facilities at different times, depending on what customers need. The VALO Hotel & Work concept increases utilisation rates dramatically. It is an innovative way of thinking about space utilisation for work, focus, spar with team members and inspiration. In addition to work and accommodation services, VALO offers fresh and locally produced food in its restaurants.

Nordic design and artefacts are well represented in the interior architecture. The visitors and the VALO Hotel & Work business community can also enjoy different sports services, a spa and even a unique sauna experience with its genuine log sauna situated on the roof top of VALO Hotel & Work Helsinki. At VALO Hotel & Work, one can find everything needed in one place, which saves time and money spent on travels between service locations.

How it works

Awards & press

Press and Media

• Article in Helsingin Sanomat (in Finnish) HS arvioi viisi helsinkiläishotellia – hirsisauna katolla yllätti totaalisesti
• Interview with Plussa Suomi (in Finnish) Plussa Suomen toimitusjohtajan Niklas Westerlundin haastattelu VALO hotellista
• Article in Kauppalehti (in Finnish) Yhteiskäyttöön perustuvat co-working-tilat voivat kävellä koronasta ulos voittajina, kun yritykset miettivät, kannattaako niiden enää maksaa omasta pääkonttorista kiinteitä kuluja. Helsinkiin syksyllä ensimmäisen toimipisteen avannut Valo Hotel & Work on päivällä toimisto, yöllä hotelli. 
• Adaptability and versability in sustainable building (VTT / Tarja Häkkinen & Paula Ala-Kotila 11/2019) 
• VALO Work tilallisena ratkaisuna (In Finnish) Fyysiset, kognitiiviset, sosiaaliset ja mentaaliset tekijät aivotyön näkökulmasta (Kalakoski, Virpi; Valtonen, Teppo; Räsänen, Pauli; Kaartinen, Jouni (2021))

The business model

The management

The staff at VALO has strong experience and deep knowledge in the hospitality business, work space environment, new age marketing, business development, design, and development of optimal and scalable digital solutions that with its various skills builds a adaptable work force.

The Board of Directors

The board members of VALO Group Oy are experienced entrepreneurs in the hotel and real estate sector with an interest in greener and more efficient properties and environments. They all contribute with various experience from the international travel industry, delivering strategic goals throughout active leadership and people engagement.

Jarkko Härmälä, Member of the Board

Jarkko Härmälä is an experienced International Travel industry professional with a solid track record of multiple top management positions in leading companies such as Sokotel Oy operating Sokos and Radisson Blu Hotels, Scandic Hotels, Hilton Hotels, and Finnair Oyj.

Jukka-Pekka Pajunen, Member of the Board

Jukka-Pekka Pajunen (J-P) is a hospitality and restaurant business professional with extensive domestic and international experience. J-P has had multiple executive roles including various positions at Holiday Club Resorts, Genral Manager at Planet Hollywood Helsinki, and Executive Food and Beverage Manager at Sokos Hotel Hesperia. J-P is focusing on developing VALO Hotel & Work´s restaurant services as an active board member at Valo Group Oy.

Janne Riihimäki, Member of the Board

Janne Riihimäki is one of the founders and innovators behind VALO Group Oy. Riihimäki is actively involved in VALO Group Oy´s strategic planning and is the Chairman of the Board of SSA Group Oy. Janne is a lawyer with almost 30 years of experience, specializing in construction, real estate, and finance and investment law. Janne also has experience as a founding contractor of multiple projects and as a board member of several construction companies. Janne is a seed sponsor in several construction companies as well as a real estate investor.

Hannu Holma, Member of the Board

Hannu Holma is one of the fathers behind the idea of VALO Hotel & Work. Hannu has been actively involved in VALO Group Oy ever since developing the idea to the opening of the first VALO Hotel & Work facility and beyond. Hannu has been an entrepreneur in construction and real estate industries throughout his career for over 20 years. Hannu is passionate about creating green, more efficient properties and environments where people can focus on creating a better world.

Company structure

Distribution of the company shares

SSA Group Oy owns 9 950 000 shares which is equivalent to 99,5% of the total share capital. SSA Group Oy is owned by a group of private investors including Teemu Saari, Minna Hurme, Janne Riihimäki, Hannu Holma and Jussi Paakinaho. Filix Development Oy owns 50 000 shares which is equivalent to 0,5% of the total share capital. Filix Development is fully owned by Erno Launo.

Use of funds

VALO Group Oy is collecting funds to speed up its growth both by opening new VALO Hotel & Work facilities and by further developing its proprietary VALO Platform and concept. VALO Group Oy also plans to roll out a franchising concept as a part of its expansion plan. By controlling the pace of these elements of growth, VALO Group Oy can adjust to the different growth funding scenarios.

Additional to the funds collected in this funding round, Business Finland has already provided VALO Group Oy with a R&D loan up to €830,000 and that funding shall be aimed at the VALO Platform and concept development regardless of the success of this growth funding round. To date, VALO Group Oy has raised the first €251,000 and the rest of the loan will be raised during 2023 and 2024.

VALO Hotel & Work's market positioning

Workspace service providers

Workspace service providers on the market offer flexible alternative for workers, typically through pay-as-you-go models or via short-term lease. Other workspace providers do not have dual-use capabilities, and their focus is on daytime use of the facilities. In relation to competitors VALO Hotel & Work offers top-grade workspace solutions coupled with hotel services, leading to superior building utilisation, possible revenue generation, customer experience and sustainability – instead of having two buildings, one for working and one for accommodation, VALO Hotel & Work covers both with one facility.

Hotel service providers

Hotels are gradually integrating coworking within their scope of services by introducing coworking. Hotels aim to increase utilisation by activating for example lobbies for daytime use. Moreover, hotels aim to address the needs of the Millennials, the next generation of workers who travel the most and enjoy collaborative and communal environments. VALO Group Oy does not see hotels integrating workspace solutions as a direct threat to VALO Group Oy and it’s VALO Hotel & Work concept as competing concepts usually lack dual-use capabilities which ultimately makes creating coherent customer experiences difficult.

Issuer key figures (actual and forecast)

All figures are rounded to the nearest thousand and presented in thousands of euros.

Further explanations regarding the financial figures

VALO´s vision is to become a leading dual-use hospitality service operator in the Nordics, Europe and ultimately worldwide. The vision shall be executed through rapid and well controlled expansion into identified areas with favourable demographics where growth companies and business travelling are driving demand.

The basic assumptions of the financial planning are based on the results of running VALO Hotel & Work Helsinki since September 2020 and related investments carried out by VALO Group Oy. The essential growth drivers of VALO Group Oy are developing VALO Hotel & Work Helsinki and other upcoming VALO Hotel & Work facilities in Finland and abroad. Maximizing the long-term returns to all stakeholders is a core strategic element for VALO Group Oy. The historical financial figures are consolidated from VALO Operator Group Oy and VALO Group Oy. VALO Operator Group Oy and VALO Group Oy merged in 2022 and form the current VALO Group Oy.

The first two years of operations were heavily affected by the global COVID-19 pandemic. VALO Group Oy received €2,2M in governmental financial subsidiaries related to the COVID-19 pandemic in 2021. These subsidiaries were used as follows: €1,23M for marketing and sales and other costs in “Other operating expenses 1” and €1,0M for fixed rent and rent related costs in “Other operating expenses 2”. In addition to these subsidiaries VALO used the VAT payment terms offered by the Finnish Tax Authorities to a sum of €1,34M. These payment terms were offered as a loan with 3 % interest and a payment time starting at 22.7.2021 and last payment scheduled 22.9.2023 The monthly repayment of €55,900 leads to full repayment of the loan by September 2023. In addition, VALO Group Oy also has a loan in the amount of €3,87M from SSA Group Oy. The maturity of the loan is 10 years with an interest rate of 3,5 % + Euribor 12 month.

VALO Hotel & Work Helsinki reached one million euros in revenue in August 2022 and is expected to turn profitable in early 2023. The management expects that VALO Group Oy will have a revenue of €15,5M with EBITDA of €1,23M and a net profit of €696,000 in 2023. The growth in revenue is driven by opening new VALO Hotel & Work facilities as well as increasing sales in the current VALO Hotel & Work Helsinki. The management expects that COGS will drop below 8 % of revenue in 2023 and further below 7 % in the years 2024 to 2026. The management expects that personnel expenses will drop to around 20 % of revenue by 2024 while OpEx 1 and OpEx2 are expected to reach a level around 30 % and 25 % of revenue respectively. OpEx 1 consists of marketing and sales and other costs while OpEx 2 consists of a real estate rent and rent related costs.

The management expects that both EBITDA and EBIT profitability will be reached in 2023 with EBITDA of 7,9 % and EBIT of 5,3 % of revenue. These figures are expected to increase to EBITDA 20,78 % and EBIT 19,96 % of revenue driven by efficiency and cost savings due to scalability. The management expects that the net revenue is 4,5 % in 2023 while increasing to 15,87 % by 2026.

VALO Group Oy is constantly looking into new facilities in the most lucrative locations attracting business and leisure travellers. VALO Group Oy is currently in active discussions regarding potential new VALO Hotel & Work locations in Helsinki (Conversion project), Espoo (Conversion project), Vantaa Aviapolis (new building project), Oulu (Conversion project), Turku (new building or Conversion project) and Tampere (new building project). The potential additional revenues from these projects are strong growth drivers for VALO Group Oy.

The financial planning for the years 2024 and forward is based on the management's expectations of 1 – 2 new VALO Hotel & Work facilities starting to generate revenue already in 2024. These facilities are conversions projects in already existing buildings. In 2025 VALO Group Oy aims to further open two additional new facilities adding revenue streams and cost savings. Thus, the financial planning for the years 2025 – 2026 is based on VALO Group Oy opening a total of 4 new VALO Hotel & Work facilities. With these new facilities and the already existing VALO Hotel & Work Helsinki VALO Group Oy expects to reach a total revenue of €47,2M with €6,3M EBIT in 2025 and €70,4M revenue and €14,5M EBIT in 2026 respectively.

At the moment, the development costs and operative costs of VALO Hotel & Work Helsinki are practically in the same P/L statement. Over time with new VALO Hotel & Work facilities launched to the market, one top organisation shall serve all the facilities in terms of technology, business and concept development. These top organisation costs will be allocated to the business units in proportion with their revenues.

Forecast

The financial planning is based on the experience of opening of VALO Hotel & Work Helsinki, and the understanding of the management team and the board members, how to scale up the business volume by opening new facilities and developing VALO Hotel & Work concept.

The expansion is well on its way in Finland as VALO is already in process of actively preparing the opening of 2-3 new facilities in the most thriving business areas and ecosystems of the country. These activities are expected to lead to opening of two new VALO Hotel & Work facilities by the end of 2024. The more detailed financial plan is shown above in the table.

Loans outstanding

All figures are rounded to the nearest thousand and presented in thousands of euros.

Company valuation

The basis for the valuation of VALO Group Oy is based on the assets and investments already made in the company. These assets include the VALO Hotel & Work concept, the VALO brand, the highly scalable VALO technology enabling efficient usage of multifunctional facilities and the multi-skilled team of VALO. The best understanding of the company is that these brands create strong barriers to entry for potential competitors as entering the market requires substantial investments. The management strongly believes that VALO brands and technology allow for high scalability.

The valuation is also strongly based on expected future cash flows of the current VALO Hotel & Work Helsinki and additional planned VALO Hotel & Work facilities. The management estimates that the profitability of VALO Group Oy to significantly exceeds the market average of comparable competitors as soon as the planned VALO Hotel & Work facilities reach the steady state. The management expects that the steady state for each new VALO Hotel & Work is reached within the second year from opening. The management expects that the growing revenue and increasing profitability will increase the enterprise value of VALO Group Oy. The management estimates that potential investors could see the company as an increasingly attractive investment opportunity as revenue and profits increase. The management currently estimates that the next financing round could be arranged at verge of expansive internationalisation.

The competitive advantages of VALO Group Oy’s concept specialities are key drivers for the valuation. The management estimates that dual use of facilities enabled by the VALO Hotel & Work concept potentially leads to higher revenues with lower costs from a single facility allowing for double profits. These competitive advantages as well as the sustainable aspects offered by the VALO Hotel & Work concept also make it an extremely attractive concept for any real estate developer. In addition to new building projects the VALO Hotel & Work concept can also be fitted into an existing hotel or office building.

Various risk factors associated with investing in the company may be significant if realised. Many of the company’s risk factors are part of the nature of its business and are typical for the industry. Each risk may have an essential effect on the company's business, profits, and the potential ability to achieve its financial objectives. The risks presented are not ranked in order of importance nor does the order in which they are presented, reflect the likelihood of their occurrence.

Risks related to the share issue and the company's shares

• Various risk factors and circumstances can lead to a fall in the market price of a share and therefore there is a risk of losing some or all of the capital invested. 
• There may be no return at all on the investment.
• The company's shares are not publicly or multilaterally traded on any marketplace and therefore there is no active or liquid secondary market for the shares. The risk in this case is that the security may not be sold at the desired time or at all, or that the price offered may be lower than its subscription price or actual value.
• The transferability of the shares is limited by a redemption clause in the Articles of Association and by the obligation to enter into a shareholders' agreement with the company.

Macroeconomic risks 

• Uncertainty in the company's core markets and in the global economy and financial markets may adversely affect the company's business and operating results. 
• The demand for the company's products and services and thus its business performance is affected by, among other things, the general global market situation, the competitive situation and technological developments. The company and its business are therefore exposed to market risks that are largely independent of the company's own actions.

Risks related to the company's business

• Failure in national and/or international marketing may adversely affect the company's customer relationships and service demand.
• The company may be unable to implement its expansion strategy and take full or timely advantage of new business opportunities.
• The company may raise less capital than planned. This may result in the company not being able to successfully implement its business activities due to a lack of funds.
• If the company’s business idea does not assert itself on the market or if the planned business development cannot be implemented as hoped, there is a risk of the company becoming insolvent.
• If the company is unable to compete effectively with existing and potential new competitors or to respond to changes in the competitive environment, it may adversely affect its turnover, profitability, and customer loyalty. Competition may become significantly more intense if competitors with more capital enter the market.
• There is a risk that the company will get negative media attention. This may lead to significant declines in sales and losses for the company because there is insufficient demand for the company’s products and services as a result of the negative media attention. 
• The company’s business concept relies considerably on its platform. Playing in a highly tech-oriented environment always creates decencies and thus risks as well. 
• The risk that the change of ownership of the real estate of VALO Hotel & Work Helsinki will not take place in the planned schedule of 2022/2023, may adversely affect the profitability of the business.
• The opening of new facilities may require investments to Furniture, Fixtures & Equipment and/or collateral to be given to the landlord, which may cause the need of additional funding.

Risks related to management and staff

• The company is dependent on its management and qualified personnel, and the loss of such personnel could be detrimental to the business.
• Failure to recruit and retain qualified personnel may adversely affect the company's business performance.
• Increasing the number of staff may harm the company's profitability.

Legal and regulatory risks

• Failure to comply with laws, regulations and general social responsibility relating to the company's activities, products and services may result in sanctions and damage the company's image with its customer groups.
• The company has no pending lawsuits or other open litigation, but as the company's operations expand, legal risks become more significant.
• The company may be subject to claims or lawsuits that could harm the company and require management resources.
• The company's legal regulatory environment may change, potentially making it more difficult for the company to conduct its business.
• The commercialisation of intellectual property rights, the distribution of products and the launch of new products involve various liability risks, such as third-party claims for alleged infringements of intellectual property rights or claims for product quality or product damage.

Financial risks 

• Fluctuations in foreign exchange rates may harm the company's operations.
• The company is exposed to changes in interest rates on loans.
• The company is exposed to credit and counterparty risks.
• The company's financial projections are subject to risks, as forward-looking estimates, targets, and other statements always involve uncertainty, and they are only predictions, not guarantees of the future.

The risks listed above are not the only risk factors affecting operations of the company. Other risks and uncertainty factors that the company currently does not identify or currently considers to be irrelevant may also have an integral effect on the business operations, business result, and financial standing of the company.

Update 21.11.2022

The company's parent company SSA Group Oy offers the right to purchase VALO Group Oy shares to investors investing EUR 99,999.00 or more under the following conditions:

Subject of the transaction: shares in VALO Group Oy held by SSA Group Oy

Amount: The number of shares corresponding to the number of shares that the investor has committed to purchase in the financing round organised by Invesdor Oy in this share issue

Seller: SSA Group Oy (2510722-6)

Price: á EUR 1.125 per share

Start and end of the right to purchase: the right to purchase starts when the funding round organised by Invesdor Oy is closed and ends 30 days after the closing

Update 15.11.2022

VALO organises an investor event

Where and when: 
VALO Hotel & Work in Helsinki on 21.11.2022 at 17-18. The event can also be attended remotely, please register using the form below.

The theme of the event is: This time, VALO will be heard directly from the investor's mouth, and participants will have the opportunity to discuss VALO Group Oy as an investment target with members of the Board of Directors of VALO Group Oy.

The panel will include Jarkko Härmälä (Member of the Board, VALO Group Oy), Teemu Saari (Chief Development Officer, VALO Group Oy), two VALO investors Joona Suomala from Easoft Oy and Petri Mertanen from Mertanen Analytics (TBA), and moderated by Erno Launo (CEO, VALO Group Oy).

The event will include: an introduction to VALO's dual-use concept and the pilot site VALO Hotel & Work Helsinki. On-site coffee breaks.

Sign up for the event

Update 7.11.2022

The company has decided to extend the subscription period until 25 November 2022.

Update 28.10.2022

VALO's investor event 7.11.2022 (In Finnish)

VALO Group Oy will organise an investor event in connection with its growth financing round at VALO Hotel & Work Helsinki on 7.11.2022 at 17-18.The event will provide an opportunity to learn more about VALO's dual-use concept and the VALO Hotel & Work Helsinki pilot site, and coffee will be served on site. You can also participate remotely, please register using the form below.

Sign up to join VALO's investor event.

Recording (in Finnish)

Update 26.10.2022

VALO's investor event 26.10.2022 (In Finnish)

VALO Group Oy will organise an investor event in connection with its growth financing round at VALO Hotel & Work Helsinki on 26.10.2022 at 17-18.The event will provide an opportunity to learn more about VALO's dual-use concept and the VALO Hotel & Work Helsinki pilot site, and coffee will be served on site. You can also participate remotely, please register using the form below.

Sign up to join VALO's investor event.

Recording (In Finnish)

Update 20.10.2022

Questions to VALO, asked by investors

QUESTION: Why does Valo Group Oy's information use Valo Operator Oy's information? Although it is stated that VALO Operator Oy is a subsidiary of VALO Group Oy, what guarantees are there that this VALO GROUP Oy is not just an intermediate company and that all the financial benefits go to the owners of VALO Operator Oy? 

ANSWER: VALO Operator Oy is 100% owned by VALO Group Oy. So all the benefits remain with the VALO concern (VALO Group Oy). VALO Group Oy's value and profits are naturally affected by the success of VALO Operator Oy. The companies have slightly different functions. VALO Operator Oy operates VALO Hotel & Work Helsinki and future sites while VALO Group Oy owns not only the operator company but also the VALO Hotel & Work concept with its intangible rights and is responsible for the further development of the concept. In addition, VALO Group Oy will lead the VALO Hotel & Work project development. This structure is intended, on the one hand, to make the monitoring of the business activities of VALO Hotel & Work properties transparent and, on the other hand, to keep the costs of the concept and projects and the operating business separate. Investors will benefit from the growth and appreciation specifically in VALO Group Oy shares.

Update 17.10.2022

Statement from investor Sakari Perttunen

Sakari Perttunen from Jupperi Invest tells about why he thinks it's a good idea to invest in VALO Group Oy.

Update 14.10.2022

The General Meeting of Shareholders of SSA Group Oy has decided to extend its financial period until 31 May 2023. According to Chapter 6, Section 5, paragraph 1 of the Accounting Act, a Finnish subsidiary consolidated in the consolidated financial statements must have the same accounting period as the parent company, unless the Accounting Board grants an exception (Accounting Act 6:5.1 §). For the above reason, VALO Group Oy has also decided to extend its accounting period until 31 May 2023. The extension of the financial period is also appropriate from the point of view of creating a "corona-free" 12-month period from 1 June 2022 to 31 May 2023 before the financial statements, which could be compared with future financial periods and the first 12-month period of future hotels.

Update 13.10.2022

Questions to VALO, asked by investors

Who owns the VALO Hotel & Work property on Mannerheimintie and who owns the land?

ANSWER:
The property at Mannerheimintie is jointly owned by the shareholders of the KOY real estate company and they are represented by the KOY Board of Directors. The KOY information is as follows:
KOY VALO Helsinki c/o Kiinteistö-Tahkola Helsinki Oy
Itälahdenkatu 15-17 Helsinki
Business ID: 2906394-5

KOY is renting the plot of land owned by the City of Helsinki.

Update 7.10.2022

The Board of Directors of SSA Group Oy has convened a General Meeting of Shareholders on 14 October 2022 and proposes that the company's financial period will be extended until 31 May 2023. This may result in a corresponding extension of VALO Group Oy's financial year, since according to Chapter 6, Section 5, paragraph 1 of the Accounting Act, a Finnish subsidiary included in the consolidated financial statements must have the same financial year as the parent company, unless the accounting board grants an exception (Section 6:5.1 of the Accounting Act). From VALO Group Oy's point of view, the extension of the financial year would result in an "corona-free" 12-month period from 1 June 2022 to 31 May 2023 before the financial statement, which could be compared with future financial years and the first 12-month period of upcoming hotels.