How EFSI benefits SMEs in Europe - KredEx case study: Muhu Leib (Estonia), bakery

There’s something about warm, home-made bread that makes it taste so much better. Martin Sepping’s business idea is built on this very special attraction of home-made bread. His aim is to bring the freshness and authenticity of home-baking to the market.

“Estonians really like to bake bread at home and we are no different. We used to bake at home, and the bread was so good that we thought of taking it to the market. The response was phenomenal. What we do at the bakery is exactly the same thing – just with better technology. Same delicious result, but more efficient,” he explains.

Martin set up Muhu Leib (leib means ‘bread’ in Estonian) on Muhu island in 2013 on the back of his experience in running a business from his previous jobs in restaurants and pubs. They have kept it simple: There’s no salesman at the baker- the person you buy the bread from is the same person who bakes it, ensuring a very homely feel. With dark rye bread flying off the shelves, Muhu Leib expanded, first to Tallinn, and then throughout Estonia, establishing 9 bakeries and employing 40 people by mid-2017.

In growing the business, Martin needed financial support to purchase the necessary equipment for the new bakeries like ovens, cabinets, mixers and fridges. He turned to KredEx and obtained an EU-supported loan backed by EIF under the Investment Plan for Europe, which aims to generate new investments by facilitating access to finance for small and medium-sized enterprises. The loan, which came at favourable conditions and without any collateral requirements, allowed Martin to equip the new bakeries, thus facilitating the company’s growth.

With volumes increasing and the business expanding so fast, Martin is clear about the future: “Right now we want to make sure we are working as well as possible. We want to concentrate on getting our systems running efficiently now before we grow any further.”

Company: Muhu Leib (Estonia)

Type of business: bakery

EIF financing: COSME LGF,  EFSI

For further information abiout EIF intermediaries in Estonia, please refer to: http://www.eif.org/what_we_do/where/ee