Ikea start-up boot camp tests life beyond flat-pack furniture

Sankarshan Murthy sinks into a sofa at Ikea’s conference center in the sleepy town of Almhult in southern Sweden. The former Tesla and Apple engineer is jet-lagged after flying from San Francisco to make a pitch for his start-up, BumbleBee Spaces, which has developed a robotic system to maximise space in small apartments by hoisting beds and other furniture to the ceiling when not in use.

BumbleBee was one of 18 companies invited by Ikea for a “start-up boot camp” in late March, following a selection process that drew more than 1,100 entries worldwide. The program is part of an effort by the world’s No 1 furniture retailer to attract a new generation of shoppers.

Mr Murthy’s robotic furniture includes sensors that can help users locate, say, a tennis racket stashed in the back of a cupboard, or put a pair of running shoes near the front door for a morning jog - all at the touch of a button or a voice command.

“It’s like having an AI butler,” said Mr Murthy, who said he drew inspiration from classic Disney cartoons featuring robotic arms and other futuristic devices.

That’s a big leap from the no-frills, flat-pack furniture traditionally sold in Ikea stores. And it doesn’t come cheap. BumbleBee’s bedroom system, installed in three apartment complexes in California and Washington, costs about $6,000 (Dh22,000) per room.

Ikea, though, needs to freshen its appeal to under-30 customers, raised in the sharing economy, who often care less about ownership than about the experience that a product or service can deliver. And their limited living spaces mean they need less furniture.

“We’re in the middle of a retail revolution, where people are moving seamlessly between the physical and digital world,” said Per Krokstade, the manager of Ikea’s boot camp. “Everybody wants smarter solutions and more convenience than before.”

Ikea isn’t the only retailer joining forces with start-ups. Walmart has a Silicon Valley incubator that’s backing ventures such as Jetblack, a concierge shopping service for upscale city dwellers, and Spatialand, which creates virtual-reality entertainment to plug merchandise sold in the US company’s stores.

The challenge is especially urgent for Ikea, which has a younger customer base than most other big-box retailers do.

“It’s a generational difference,” said Ray Gaul, senior vice president of research and analytics at Kantar Consulting. “Ikea has woken up to the fact they can’t deny this anymore and have to change with the culture.”

Ikea has already acquired TaskRabbit, a San Francisco-based start-up that dispatches workers to assemble furniture in customers’ homes. And it’s about to finish a prototype for a high-tech table that can brighten or dim room lighting with a sweep of the hand across the tabletop. The technology uses electrodes covered with an electrically conductive paint developed by Bare Conductive, a London-based start-up that took part in Ikea’s first boot camp in 2018.

This year’s participants included Copenhagen-based Freemi, whose co-founders Rasmus Thude and Jamie Neubert Pedersen have developed an app to help people give away their old furniture and other possessions. “People, especially the younger generation, are fed up with our throwaway culture,” Mr Thude said. The service, currently offered in Denmark and the Netherlands, ties into Ikea’s goal of reducing waste.

In parallel, Ikea has launched a furniture-leasing program that it plans to expand to 30 markets in Europe in the next year. Customers who subscribe to the service can get either new or used items that the retailer takes back at the end of the lease.

Other start-ups Ikea is considering include San Francisco-based Jido Maps, which makes augmented-reality software that lets users save and recover digital objects from one session to the next; London-based Skipping Rocks Lab, which has developed edible food containers made from seaweed that could be used in Ikea’s cafeterias; and Copenhagen-based Flow Loop, which recycles and purifies water in the shower.

For entrepreneurs such as Mr Murthy, a chance to partner with a company that sells $44 billion worth of goods a year is worth a bit of jet lag. Ikea, in turn, wants start-ups to see the retailer as “a natural partner,” Krokstade said. “When they have made an innovation they should come to Ikea and say ‘Hey, look what we have done. Can we co-create with you?’”