Litium is primarily a software provider, which has claimed a top-three spot in the Nordic market for digital commerce platforms. The company offers its Litium On Demand solution through a cloud-based model. The market for digital commerce is growing strongly, driven by the digitalisation of business models, and a shift from physical to digital storefronts that is forcing B2B and B2C corporations to adapt to the new landscape.
We believe that Litium is well positioned to further solidify its position as a top-three provider of digital commerce platforms in the middle-market segment in the Nordics. Litium’s digital commerce platform, Litium On Demand, has been developed over several years and offers an attractive value proposition for customers. Litium operates in the fast-growing global digital commerce market, which is forecast to grow with a CAGR of 9.3% 2017-2023, driven by the structural digitalisation of society and retailer business models. Litium wants to establish itself on one non-Nordic market by 2021, which we believe will fuel further growth.
The long-term risks include financial risk, dependency on key partners, and increased competition. Litium is not currently generating positive cash flows, and additional capital will likely need to be raised. In addition, there is a risk that the company will not be able to reach its target of generating a profit in 2021. Litium is dependent on its implementation partners, which are responsible for driving sales of Litium on Demand, and are a key part of Litium’s business model. The software business is highly competitive, with a changeable landscape, which might require Litium to increase R&D investments in order to keep the digital commerce platform viable and up-to-date.