Startup of the Day: Lithuanian suspension testing technology LABA7
LABA7 is a Vilnius-based startup providing high-quality suspension tuning, servicing, and diagnostics equipment. The solution is already used and recommended by such worldwide leaders as KTM/WP, ZF Sachs, KW Suspension, EXT, and others. So far, the startup has raised a total of €890,000 from investors.
In the Startup of the Day column, Co-founder and Business Development Manager of LABA7 Marius Ramanauskas shares the details about the startup’s idea, its product, and future plans.
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Tell us about your startup. How does it work?
We are producers of high-quality suspension tuning, servicing, and diagnostics equipment. We manufacture the equipment and sell it to racing teams, suspension manufacturers, and suspension tuning and servicing workshops. During the short life of our startup, we are already used and recommended by such worldwide leaders as KTM/WP, ZF Sachs, KW Suspension, EXT, and others. You would not find any World championship for bicycles, motorcycles, cars, or 4x4s where at least one team would not be using LABA7 equipment.
How did you come up with the startup’s idea? What was the reason/motivation behind it?
A friend of ours who is rebuilding and servicing motorcycles and car suspension asked if we could produce a shock dyno for him as there are no good options in the market. Andrius Liškus took it as a challenge and together with Andrius Petkauskas started working on the project which was meant to be a quick one, but ended up with 1 year of development and in the end, being the first of our product which immediately attracted sales. That led to the first investment and expansion of the team, and warehouse, pushing sales, and placing ourselves on the map.
How long did it take to reach the prototype or MVP? What did you encounter?
It took us half a year from the idea to the first working prototype. The most challenging part was to make mechanics, electronics, and software work in unison and deliver as accurate results as possible. Another half a year was needed to make the product ready for the market. After that, we made a couple of sales and attracted the first investment which helped us make the next needed step.
When exactly did you launch your product? Or when the launch is planned?
It was approximately 3 years ago. Since then we have launched many more products and right now have 4 variants of Shock dyno, 2 variants of Spring rate dyno, and 3 variants of vacuum pumps. Soon to come is our most complicated project so far – an electromagnetic actuator dyno that can simulate how suspension works on the track as well as deliver the speeds and forces which are not possible with current dynos. Afterward, we are launching race car wireless scales for weighing the cars for balance adjustment.
Tell us about the startup’s business model. How do you monetize your product?
Well, we manufacture the products in a niche market of automotive sport. So the competition was not very harsh (we are talking about ±5 competitors). They were sleeping a little bit on what they have done. We came with unique features, much more up-to-date software and of course, set the sales process right. We go for extensive outreach which brought results and already this year we do see that our inbound sales are growing nicely, and word of mouth is bringing clients. But one of the most important selling points was and still is our after-sales support. This is what makes hardware sink or swim.
What are your target markets and consumers?
LABA7 sells globally with the main market being the EU, but actively increasing our presence in the US and Canada. Recently we opened Arabic Peninsular, sold to Australia, and New Zealand. To my mind, only Africa and Antarctica remain where LABA7 is not yet there.
If the startup has already launched the product, what are the results?
We went for €220,000 in sales in the first half a year, followed by €800,000 in the second year, and now aiming to close the year with €1.2-1.4 million. We measure the quantities sold, sales coming from current products and new products, market-wise as well.
What about your team? How many people are working in the startup?
Right now we have 15 people working for us, we are always looking for new salespeople to add as well as people who are interested in automotive — they can find their place here easily.
Have you already raised any investments?
Yes. We closed 2 rounds. The first one was with 70 Ventures where we had €250,000 coming to us in two stages: €50,000 for bringing the sales team in and €200,000 when the KPIs were reached (we did it quickest in 70V history – 5 months time). And just recently we closed a second round of investment led by Coinvest fund together with the Lithuanian Business Angels association and angel investors. The amount is €640,000. We will use this money for R&D, marketing, and team expansion.
Our journey just started. We want to shake the market a little bit, coming with unique products which were not in the market or products which have features that were not available in the market. We put our customers first and listen to them as much as we can when we are developing the product and of course as mentioned earlier in the after-sales stage. 2025 should be an interesting change of direction in the automotive market when the EU agrees to support an even more circular economy. Shock absorbers even for regular cars should become serviceable, and this is where our machines will be needed on a big scale. So we are doing our homework till that time to be ready.
Moreover, we want the LABA7 logo seen in every top-tier racing — Formula 1, Dakar, WRC, Le Mahns 24H, WRX, WTCC, MTB XC, Downhill, MXGP, MOTO GP, etc. We hope that this will as well help us to promote our country — Lithuania, which is one of the best places for a startup to be in.