Rapal: Built environment specialist goes global

The company Rapal seeks strong international growth in several markets. The growth is accelerated through Tekes funding and Team Finland LetsGrow finansing programme.

Established in the early 1990s, Rapal specialises in consulting services and software for developing working and living environments. The firm, which is wholly staff owned, helps companies develop the working environment to meet changes in working practice, and to save office costs and to draw up reliable infrastructure cost estimates.

Modern work is location-independent and current offices are not necessarily designed with this in mind. In the best case scenarios Rapal can achieve a triple win situation. Employees can be free to decide for themselves the best place to do the job, the company can save office costs and the environmental load can be reduced through less commuting and business travel.

"Through our software and consulting services Rapal's aim is to verify and assess the impact of developing the working environment in monetary, carbon footprint, employee satisfaction and wellbeing terms," says CEO Tuomas Kaarlehto.

Growth in the United States and Central Europe

Rapal's office is located in Leppävaara in Espoo, and the company has a subsidiary in the US in San Francisco. The group has about 70 employees. Turnover has been steadily rising since the company was established and annual growth stands at around 15 per cent. The company's customer base is made up of government and large corporations in various sectors. The largest client of the California based subsidiary is the biotechnology company Genentech.

"The United States is our most important market. It can be really difficult, but it is definitely the most productive. We are also currently looking into the potential in Central Europe, because we believe our products have a clear market there."

Rapal is seeking international growth through the Team Finland LetsGrow finansing programme, where Finnvera offers unsecured loans, Tekes provides funding for securing expert services and Finpro advice for internationalizing.

"Our cash flow and equity are in good shape. Money has been set aside in our books for capturing new markets. The loan from Finnvera, obtained through the LetsGrow programme, is an excellent way to share the risks involved in internationalisation and provides some financial breathing room, which is especially useful in these economically tough times. The Tekes funding has been used, among other things, for marketing research in Central Europe and China."

Tekes has helped in many ways

Tekes funding has accounted for a significant percentage of Rapal's product development costs and has been used for numerous projects. Most of the funding has been loan based. Kaarlehto says that the Tekes funding has accelerated product development and played a significant role leading to the current, highly competitive product range.

In the Built Environment Innovations SHOK programme, Rapal developed a service for developing working environments. It describes the current state of an organisation's use of space from the environmental impact and employee satisfaction points of view.

Rapal participated in the Tekes and world renowned UCLA University Global Access Program (GAP) in 2006 and 2008. The UCLA MBA team recommended that Rapal take their work environment software to the United States and invest a million dollars to set up a subsidiary there and recruit sales staff.

The subsidiary company however started operating by a slightly different route as Rapal acquired a US work environment related consulting concept.

However, the GAP team advised against the infrastructure management software, because the US Public Roads Authority monopolises the market and only a few local firms have access to it.

"Our product still felt better than others out there at present. GAP helped us understand a great deal about a considerably different business world and its dynamics from here in Finland, and brought us a lot of contacts. It was a really useful experience."

Local business partner in bid to conquer China

Rapal was selected for the Growth Track service two years ago. Kaarlehto sees great potential in having your own account manager Growth Pilot who seeks out the best suited public expertise and financing services for each company.

"There is no need to go asking for information and advice from lots of different places, rather our advice for funding and services come from one specialised source. It is really good."

Rapal is set to investigate local markets in China under the Tekes and China's prestigious Tsinghua University's business programme Tsinghua SEM. Kaarlehto says that Rapal's aim is to set up a joint venture with a Chinese company in 2016.

"Our local business partner monitors and spars with MBA students. They are seeking potential customers, and thinking about how our product should be marketed in China, and how to take care of recruitment. We believe we can get highly competent local players to join our team."

More information

Tuomas Kaarlehto
CEO, Rapal Oy

Kaj Nordgren
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