Sebastian Karlsson On Raising $360 Million To Drive Digital Evolution In Society

In the world of entrepreneurship, success stories often emerge from unexpected beginnings, and Sebastian Karlsson’s journey is no exception. Born and raised in the cold and dark winters of Sweden, his trajectory from a professional soccer player to a founder and CEO of a venture success is a tale of resilience, determination, and the power of surrounding oneself with the right people.

In this episode, you will learn:

• Sebastian Karlsson’s journey from professional soccer player to successful entrepreneur showcases the transformative power of resilience and determination.
• The “napkin agreement” symbolizes the commitment to ambitious goals, including acquiring 50 companies and achieving substantial revenue.
• Lyvia’s strategic focus on business-critical software and decentralized structure underscores the importance of working closely with CEOs and understanding total addressable markets.
• Raising over €340 million in debt and equity, Sebastian attributes their success to timing, luck, and building strong relationships with banks.
• Lyvia’s vision extends beyond being a distributor, aiming to become the go-to partner for significant software companies entering the European market.
• Sebastian emphasizes the significance of being surrounded by the right people, staying curious, and maintaining a level of naivety for entrepreneurial success.
• As Lyvia pursues an IPO and financial independence, Sebastian’s journey serves as inspiration for aspiring founders, highlighting the importance of adaptability and strategic partnerships.

SUBSCRIBE ON:

For a winning deck, see the commentary on a pitch deck from an Uber competitor that has raised over $400M (see it here). 

Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.

About Sebastian Karlsson:

With over 20 years of work experience, Sebastian Karlsson is a passionate and driven investor and entrepreneur with a proven track record of creating and growing successful businesses in the software and services sector.

He is currently the CEO and co-founder of Lyvia Group, a company that develops and delivers business-critical and growth-enabling software and services to customers all over the world.

Sebastian is motivated by the challenge of solving complex problems, delivering value to clients, and empowering their team of talented and diverse professionals.

He believes in building long-term and trusting relationships with stakeholders, and fostering a culture of innovation, collaboration, and excellence.

In addition to leading Lyvia Group, Sebastian is also a board member at Esmaeilzadeh Holding, an investment company that focuses on establishing and building entrepreneurial platforms.

Esmaeilzadeh Holding has holdings in more than 15 companies and a total net asset value of BSEK 7,7. As a board member, he leverages his expertise and experience in new business development, key account management, and product marketing to support the growth and profitability of our portfolio companies.

Sebastian also provides strategic guidance and mentorship to the entrepreneurs and leaders of the companies they invest in. He is proud to be part of a network of like-minded and ambitious individuals who share a vision of creating positive impact and value in the market.

Connect with Sebastian Karlsson:

• • ContactOut
  • LinkedIn

• Crunchbase
• Bloomberg

Read the Full Transcription of the Interview:

Alejandro Cremades: Alrighty hello everyone and welcome to the dealmakerr show. So today. We have a really incredible founder. You know a founder that he was a professional soccer player I mean a football player as you would call it in Europe right? where I’m from but obviously in the us we have a different terminology but we’re gonna be talking about. You know all the good stuff that we like to hear you know when it comes to you know building scaling financing companies. He’s been with his partner for over eleven years you know how this all came together also about raising money they have raised quite a bit of money for their company. And they’re doing really amazing with a tons of companies that they have acquired with a lot of employees and they they have a raised over 340000000 in-depth and inequities and there’s tons of stories around this tool that we’re going to be touching on so again, very inspiring conversation ahead of us. And without further ado. Let’s welcome our guests today Sebastian Carlson welcome to the show so So give us I walk through memory lane. How was live being born and raised in Sweden.

Sebastian Karlsson: Thank you, Thank you for that. What what an intro hard hard to follow up that. Thank you.

Sebastian Karlsson: I think it’s dark and cold as everyone probably know. It’s quite quite a a generic picture but it’s but it’s true. But no I will say sweet is a really good. Ah good country to grow up in. Um I’m not sure if everyone knows but we actually have a. We are a quite socialistic country but we have some benefits. We for example, every every citizen had the opportunity when I was small to to get a computer really early and also we had broadband quite soon. So I think that’s why we have been good at um, actually creating company I think I think Stockholm when when you compare it to. To rest of the world I think in if you just look at the unico per copy I think we’re second by ah Paul Alto in San Francisco so so I think the the fundamental was there from the beginning so I cannot complain anything at all.

Alejandro Cremades: So how was it like also for you at ah at a personal level. You know, growing up in a household with a single mom. You know I’m sure that that was quite inspiring for you as well.

Sebastian Karlsson: Ah, no, but I’ve always seen like I’ve seen seen my mom working ah double shift and and just ah putting everything out there to to give ah the kids the opportunity to to do something else I think always I’ve been um.

Sebastian Karlsson: Ah, been feeling like I’m I’m quite lucky to have someone who’s who’s putting their life sacrificing their life for for me to get opportunities. Also I have I felt some sort of ah obligation to to do something well with with whatever I’d done I made a promise to my mom when I was when I was when I was younger to take care her when when she she retired and I was fortunate enough to ah to be successful in in some levels. so so I could could acquire a house to to her here in Stockholm. so so I’m proud of that and I’m also proud of my mom for for giving me the opportunity to pay her back.

Alejandro Cremades: That’s amazing now in your case, you became a professional footballer. So how how did the whole idea of kicking the ball and and getting into it. You know how did that come about and and making it to become a professional I mean that’s a pretty incredible.

Sebastian Karlsson: Um.

Sebastian Karlsson: Yeah, but I think I think it’s like all every kid if we get some ah some ah positive affirmation where we’re doing something. Yeah, and then we continue to do that and it it was the same for me like I I was quite early on gifted enough to to be able to. To play a little bit better than then than my friends. So um, so then of course I I tried to to take this as as ah, as long as I could and I and I had and I’d been blessed to to be able to have it as a living since I was between eighteen and I think 27 so so I’m I’m grateful for that period and it was a fun time and also. Good learnings. You know you know you know that it’s not that fun to to practice especially in Sweden between January and April because we have a different season here and then you go into to the fun part between between April and and the later stage of October but but ah, but the boring part during the winter that I think um. Gave me the brain power and and grit that I also can translate it into to to my next career which is creating ventures.

Alejandro Cremades: So what about what about you know, the the whole ah soccer career that you did soccer football career that you did you did it from 18 to 27 as you were saying you know you got the grid I’m sure the competitiveness the the wanting you know to to get stuff done. You know, dealing with the.

Sebastian Karlsson: Yeah, yeah.

Alejandro Cremades: Whatever adversity you had in in front of you. How do you think that that has shaped you up to really become the entrepreneur that you are today.

Sebastian Karlsson: Now what I think you you you need to learn how to to also ah build relationship with with 22 or sometimes up to 30 other guys and every every often guys who is um. Is good at sports is also quite I will say alpha if you if you are if you are looking at some sort of persona. So I think it’s it’s quite ah it’s quite a tough and challenging environment to be in ah in a locker room and I think you you learn to handle pressure because say if you. Playing on the on Tv for example or if you have a big ah crowd. Of course you get a little bit nervous and you need to to be able to handle that and I think it’s the same there. You need you know and learn how to how to build relationship you learn also when you need to stick up for yourself and like I said the the thing before about pressure and I think. Ah, think pressure doesn’t affect me that much. Of course everyone gets affected by pressure. But I think I can I can I can learn to switch it off and on when I need to and I think like I said those learnings I’ve I’ve ah transferred into into when I’m working with my business.

Alejandro Cremades: So let’s say that’s a very important point pressure because obviously as founders and there’s tons of founders that are probably listening right now that are wondering about pressure you know pressure of running out of money pressure of needing to hiring people pressure off meeting debtlines being able to deliver to a customer. So let’s let’s put that pressure now in into the game. Let’s say you are now in a soccer field. You know the score is equal in all of a sudden the last minute you know there’s a penalty There’s a penalty that they referee you know has called and you just put it there. You are going to be taking it. You tell your.

Sebastian Karlsson: Ah, yeah.

Alejandro Cremades: Your teammates that this is yours that you’re gonna make this one and let’s say you’re right? there. It’s just you and the goalkeeper in front of you the whole stadium looking at you. Everyone is looking at you Obviously the pressure is on how are you able to remove those voices to to get out of your own head to be able to be in the game and to just. Just be in action.

Sebastian Karlsson: I was a goalkeeper but even then I could I could take a penalty but and I have done that in the past but but I don’t think I don’t think I think it’s like everything else. You don’t start with your first venture and and you raise. What I know $3000000000 the the first seed rounder and something like that and it’s the same with the with football you learn how to compete in front of 50 people five hundred people five Thousand people ah on television. So you learn and and you you graduate the. I get exposed to more and more pressure and then but I but I’ve also seen and I don’t know what what? that’s coming from because I don’t say that it’s the best players actually playing in in premier league or or the highest dig all over Europe or in your home country in Spain I think it’s the one who has the best decision making. And like you said can handle pressure I don’t think I’m not sure if that’s something is built in to to some sort of characteristic. Ah and I can’t really answer the question regarding regarding pressure. But I’ve always been comfortable around pressure. Um. But of course of course you always have some sort of ache in your in your chest or stomach both for taking this penalty as you as you ah mentionedly described. But but but also when you when you’re having pressure towards for example, stakeholders when when you build a company.

Alejandro Cremades: So So obviously you know you can’t be playing soccer Forever. So 27 you know you’re old. That’s the time where you decide to ah hang the boots. So your next day chapter was ultimately starting your own thing and it was a sales company. So. What were the sequence of events to you thinking hey I want to start something on my own rather than you know going and working from some for someone else.

Sebastian Karlsson: Nobody but I think I had my my soul-searching period and I I saw that some of my um, my teammates they went over like I said playing in prier league and the wages having primi league compared to the swedish league is the discrepancy is ridiculous. So. So I was thinking of myself I can do this football thing since I until I become 35 and maybe 40 but I will not I will just put my career and my life on hold. So I was just soul searching for I think at least 2 years and and but building up my plan. What am I going to do. Then ah again I’m fortunate enough to meet meet people who had much higher competence and experience than I had so I actually co-founded this sales company and we did both customer support b 2 b and b two b b two c sales we did. Sales as a service to to other customers. But I will say in the beginning when I when I started this I was just the onep piggybacking on on the other two so they were they were the stars and running the show but still I understood quite early that you need to be around people that is much better than you and I think that’s also. I will say in advice if you if you for too long of a period are are absolutely the best in the room then it should change the room and and I think I think I’ve always been able to surround myself with with people that is always challenging me and people has ah.

Sebastian Karlsson: Competenceies and and um and um and and different they have just been better at different things than than I have been So So um’m I’ve been fortunate enough have be around a lot of good people. But I’ve been so. Skillful enough to be able to see if I’m if I’m the best in the room change room.

Alejandro Cremades: So obviously you had to change room you know eventually and that meant going to Stockholm and they essentially what happened is that they you went there to work for PWc but as they say once an entrepreneur entrepreneur always an entrepreneur entrepreneur so you got the the venture you know in you.

Sebastian Karlsson: Yeah, yeah.

Alejandro Cremades: And that’s what got you? you know, perhaps switching from corporate again to venture. So so walk walk us through those transition and sequences of events that needed to happen there.

Sebastian Karlsson: No, but I think I think when I when I grew up I thought that going to pwc was was like okay now I made it but like you said I was there for like. Maybe six months and then I was starting to like oh I want to be on other side I want to be on other side I don’t want to work with with this this part I want to be on the other side. so so I again was lucky enough to ah to run into a guy called side as I saw them it was one of them I would say. Best serial entrepreneur the last twenty years here in the nordics he was a chemist. He invented the world’s hardest glass I met I met with him because they were acquiring a company from pwc as an advisor and I just had a lunch with with those guys and after a lunch and also cooperating because I sended a lot of deals to them. Ah, then we then we actually had a lunch where we were talking about shouldn’t you do it work with us and and after after a couple of of hours read beers I was yeah I signed for for for them and I’ve never regret it and and again when I when I came from pwsu. A lot of competent people. But when I came to that side and and met with with all of those entrepreneurs it was another level. So like I said I I felt the worst I was definitely the um, the worst in the room and then I thought okay let’s ah, let’s go through with this and just extract.

Sebastian Karlsson: Everything that I came from from these guys.

Alejandro Cremades: So then how how did you get back into the into the venture wagon. You know how? how did you make that jump.

Sebastian Karlsson: No, we actually so so we had some ah different ventures. So what we did in the beginning we was actually a private incubator. So in Sweden you have something called ladder and on Target which means if you do research own the ip that you do research about soyid invented the world of soce glass we actually owned ip so that’s his like as I claim to fame. And he been able to commercialize that. So so we did that we took a lot of ah, ip from from academia and tried to commercialize. It. Not everything went well but some of them did. But then we also started to build them a venture looking into source ah products so we had like a portfolio of. I would say I p that wasn’t it. It didn’t have a clear go to market strategy. It didn’t really had the first paying customer and and I met with them the the co-founder and I will say the engineer and the brain behind the the software and and. That was also inside this group that I’m talking about before so me and him teamed up. We took it to all of the nordic countries in in 3 years we got the Vc Backing it’s still Vc backed. They called Nvis Today it’s ah project based cm for for the real estate and and also an air and handling system for for real estate industry and I will say that was my a little bit claim to fame even if it was ah it was not anything near what I’m what I’m doing today but but after 5 years a Ceo I did a succession.

Sebastian Karlsson: And then then I teamed up for real with with my cofounder that I work with today. Um, but he has always been a peripheral backed me in in my other other ventures.

Alejandro Cremades: So yeah, so you did a few ventures. Obviously it was the same investors. You know, same cofounder I Want to talk about because they are you know with your cofounder you’ve had you know quite a successful partnership and I want to talk about that time where the 2 of you guys were in a restaurant. And it was time to you know, try to put some ink you know to paper you know and to make it official that you guys were Co-founders. So What happened what happened there.

Sebastian Karlsson: No, but like like I said my co-founder I love him to death now. But ah, but he is really vague. He’s always a lab but let let’s start. Let let’s do it. That’s perfect are are you joining I was no when I was starting and I was like side. Please please can we put something into an agreement. And so why don’t you trust me? of course I trust you? But like if I’m going to put all my energy. All my all all my money into this this venture then we need to sign something and then he just took a napkin and and I have this so this is not this is not like ah a found founding story. Ah, like Noiman did about the kibbutz or anything like that. This is actually true I have it still ah in in my home. But but we took this napkin and we put down everything and he had he had 3 kpis in 5 years We’re going to acquire 50 companies and do 500000000 ah, swedish corona in abitta that’s around fifty million Euro in in in in another currency so that was the thing that he put down on napkin my name his name and then we signed it. So I think I think that’s a good story and and um, like I said I keeping that napkin.

Alejandro Cremades: That’s incredible now for the people that are listening to really get it. What ended up being the you know model you know of of Libya group. What are you guys doing.

Sebastian Karlsson: So I will say that we we allocate capital that is what we do ah but to be able to allocate capital then you need to have vehicles to allocate capital through so and when we when we build our start our venture we often of course looking for to put in our own money into that. But also to add ah additional ah depth. So we have some firepower and and then we try to build a portfolio of ah of companies. So we acquire companies and Livia is focused on I would say business-critical software. And service provided towards business- criticaltical software. So we see business criticalical software as and ep cerm ah bi cybersecurity and of course I would say niche software that is connected or entangled to ep or cm so that is where. Where we are focusing when we acquire a company but now when we have acquired 42 companies all over Europe I also say that if we have the possibility to grow organically if the if the total addressable market is there. If you see that the kpis for for organic growth and customer acquisition cost lifetime value lead to deal in percentage days if you if you know all of these then you can actually do a calculation for for allocating capital organically much better than than to acquire a new new new vehicle.

Sebastian Karlsson: And also I think the the biggest risk is is actually not sometimes the numbers. It’s more about peoples every time you you acquire 1 new company. You also get exposed to to 1 more person and and I think the biggest um the biggest risk is actually. Ah. Person and relationship because especially if you’ve been running your your company. You’re the founder and then all of a sudden I acquire 100% of you and we’re going to work together because you have an earnout or or an equity component in Libya then of course to go from being the star and this is this is my baby. To actually be able to yo. Okay, you need to listen to to my rules as well. That could be a shift for someone so I don’t think everyone is ah made to work in an environment when they’re not 100 % own in the company I think I would actually have problems just being an employee today. So I understand them 100 %

Alejandro Cremades: and and and I guess you know for for a structure like this I mean where you guys have like 42 companies you know, credible amount of employees to how do you go about making sure that let’s say each and every single one of those acquisitions.

Sebastian Karlsson: So I think that is the biggest challenge.

Sebastian Karlsson: Yep.

Alejandro Cremades: Is successful. You know when it comes to the integration which is the toughest part and also how do you go about making sure that you guys are able to to keep everything flowing nicely amongst all these different companies that you’re putting under that same umbrella.

Sebastian Karlsson: Now but we have we have a rule so for every 8 company. We have one growth director and growth director is the 1 responsible for that portfolio. So ah when you just look it down like 8 companies per growth factor. It has it isn’t that many? Um. We’re also quite decentralized so I will say the growth director’s main objective is to see do we have the right ceos and so the Ceo is the one who’s calling all the shots. So we we put a lot of trust into the ceos and the entrepreneur that we acquire and we want to work with Thes that we acquire so often often they they ah they um. Transferred part of their enterprise value when wequire them into into ol Lia shares for example, um, and then I focus mostly on the negative outliers. So that sounds boring but I would say at every given time It’s always like 5 to 8% and of the company that has some problems they’re doing a succession. Maybe they are churning right? now we need to put some energy into that. So I focus mostly on on the negative outliers and and then I work tight with the responsible growth director for those. But I don’t really focus on on on the good ones so because they they are. They’re doing this themselves so our strategy is to be decentralized. The ceos is calling the shots. The growth director look through that we have the right Ceo in place and then of course what we as an owner decide is about.

Sebastian Karlsson: All the over liquidity that the companies ah create how we’re going to use that am I using that from Hq to acquire a company for example in Spain or the company itself. Do they have the kpi so I can see that the return for my shareholders is much much better if we keep it in the in the company itself. So so that is that is what we. And more as a strategic partner do and then of course we’re working with exercise like um, do they have enough of a total addressable market that is something that could be of ah, an issue sometimes if there are too niched of a software. For example. So then we need to do some product roadmap and leap of faith into new verticals or or new regions and also we try to be as close as a strategic partner to to all of our customers. So um, we try to always.

Sebastian Karlsson: Somehow invent or or get insight so that we can talk to c levels so actually also be included in in the board and so so we work with the different matrix unsofed matrix crallish matrix and also the kpis for growth as I talked about before and if we do them. Over a long period of time then we know that we’re going to to succeed and so and that’s also important. Sorry if I’m just shattering on here but but it is important sometimes also to so Zoom out a little bit. You cannot always just look at this quarter this quarter this quarter. You need to see okay where were they 2020? where are they now. And sometimes you need to have a dip in the curve because for example, you need some sometimes to to hire a sales guy to to go to the to a new region or or something like that. So. So yeah, long long answer but that’s that’s how we how we work with the company.

Alejandro Cremades: And then what about and then about capitalizing you know the operation I think that you guys have raised about three hundred and forty Million Euros you know between debt and equity. So how has been to the journey of raising the three hundred and forty million and

Sebastian Karlsson: Yep ep.

Alejandro Cremades: How do you think about that balance between debt and equity for something like this.

Sebastian Karlsson: Yeah, but I think we always have a leverage between in in now when we we’re not in ah in a public environment. We work with between two and a half and three and a half um but when we will go public which we’re planning to do in in. Um.

Sebastian Karlsson: Later stage or midstage of 2025 then we will have a ah lower leverage. Um I think also you need to sometimes realize that you’re being quite lucky we we were raising the first bond of eighty million Euro ah in ah 2021 good times. Um, and and then. We had really good numbers organic growth as well. So we’ve been able to to raise additional firepower and then I need to also give a shout out to ah the banks indicate that we work with today we work with a bank called dbe in the nordyx and also danskibank. And then be really supportive of our journey and they understand us fully and also we build a relationship for for almost one and a half year before we actually signed the facility facility agreement and that facility facility agreement was signed in during the summer in 2023 and which was quite a tough time. Ah, but as well. But but they put a lot of faith in us and then again you see that you need to be lucky enough and also expose yourself towards and this type of opportunities but sometimes also timing needs to be there and I think we have timed quite. Quite good timeslos for for her for raising the capital.

Alejandro Cremades: So when you raise capital obviously is raised on a vision right? And that’s the way that you’re also enrolling employees getting transactions done is because there is a vision that everyone is going towards. So if you were to go to sleep tonight Sebastian and you wake up in a world where the vision. Of the group is fully realized what does what does that world look like.

Sebastian Karlsson: No, but I think I think ah in the in the first phase as I would say that we are a distributor of software business critical software all over Europe um, everyone sees as the vehicle. So if every big. Ah, sauce company in in the Us or India want to actually penetrate the european market you will turn to us and also the ones who who has their own software. They turn to us okay, acquire us because we know that you can get ah spread and distribution all over Europe. So I think. I think that is my and my aim and also little bit more closer on after we yeah ah if we just tie to to the business plan when we have deployed the money from from a future ipo or we also have a self. Ah. Financed a mean agenda from from there on. We don’t need to raise any more capital we can just work with our own cash flow and decide quite much ourself. What will be the leverage um is is the is the interest high. Okay, then we need to lower the leverage is it is the interest low yeah of course like then we can raise the leverage. So. I think to be able to actually control every single thing of Libya and also be the the main partner when you need to distribute your your software in Europe that is ah that is my my end goal for this.

Alejandro Cremades: So now let’s say I’m able to put you into a time machine Sebastian and I bring you back in time to that moment where you were concluding your career as an athlete and you’re 27 and you’re thinking now you’re going through that soul searching and you know it’s the moment where you’re thinking hey maybe I should launch something of my own. Maybe I should start my own company and let’s say you’re able to go back in time. Ah, you’re able to be right there with that younger Sebastian. And you have the opportunity of giving that younger sevatian one piece of advice before launching a company but would that be and why given what you know now.

Sebastian Karlsson: Ah, one. That’s that’s a really good question. What advice would I would I give myself? Um, yeah I want to put put into print. Something that I’m saying today because I didn’t really know that I was just fortunate enough to to be able to do that but just surround yourself with the right persons like I said before and I didn’t really understand that but but I have some sort of curiosity and that’s the second one always be curious and naive because. I’m not comparing myself to einstein I don’t I don’t have that ego but but he’s saying I wasn’t the smartest one but I was the most curious and I think he has curiosity to always actually take that lunch I meet with a lot of like young entrepreneurs still so I can be able to okay, what is the new technique. How are they pitching. Do they have something to learn me so be curious and surround yourself with with with with people who are better than you I will say that is that is ah the thing that I will put into print to to young Sebastian and because that is what my biggest lesson is today.

Alejandro Cremades: I Love it So Shavasia for the people that are listening that will love to reach out and say hi. What is the best way for them to do so.

Sebastian Karlsson: You can go into Linkedin sebastian callson with the with the k or you can just email me at sebastian.callome at livearoup.com

Alejandro Cremades: Amazing, well easy novel sevast and thank you so much for being on the deal maker show today. It has been an honor to have you with us.

Sebastian Karlsson: Thank you Alikhan It’s been honored to be here. Thank you for that.

*****

If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic. And if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help, whether it is with your fundraising efforts or with selling your business, you can reach me at [email protected]

Podcast: Play in new window | Download

Subscribe: Apple Podcasts | Google Podcasts | Spotify | Stitcher | TuneIn | RSS | More