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 see Litium as 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. 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 digitalisation of society and retailer business models. Litium wants to establish itself in one non-Nordic market by 2021, which we believe will fuel further growth.
Long-term risks include financial risk, key partner dependency and strong competition. Litium is not generating positive cash flows so additional capital will likely need to be raised. There is a risk that Litium will not be able to hit its target of profitability 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 its business model. The software business is competitive, which might require Litium to increase R&D investments to keep the digital commerce platform viable.