Disclaimer: Unless noted otherwise, views and analysis expressed here are the author's own and based on public sources. The article is intended for informational and entertainment purposes only. This is not financial advice. Please consult a professional for investment decisions.

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A high-profile Swedish compounder goes public by offering 100% secondary stock at a steep valuation. Institutional investors roll their eyes and mostly stay away. Nevertheless, the IPO ends up oversubscribed. A year passes. The share price is down by a quarter. Organic growth and pace of M&A both disappoint. The founding CEO (top left) and Deputy CEO (top right) switch places.      

In a market gripped by fatalism, why care? 

Because the company is Röko: the purported Noah’s Ark of Europe’s most resilient businesses. Since being founded in 2019 by Fredrik Karlsson, Tomas Billing and Johan Bladh (the new CEO), Röko has grown from 0 to SEK 6.5B ($700M+) in revenue and from 0 to SEK 1.3B ($150M) in EBITA:

The deep-dive from March 2025 instantly became one of our most popular pieces: Walking away from a $6M/y job to build a $600M+ revenue HoldCo. Our take on Röko, Sweden's newest unicorn.

One year later, we revisit the subject to explore topics such as:

What do Röko’s businesses actually do? 

What does the long-term performance of these businesses look like? 

And finally, why does Röko never buy 100%?       

For what it’s worth, we believe that Röko is an outstanding company. It’s definitely not Storskogen - another rapid-fire aggregator that grew to almost $2B in sales during Covid, before flaming out in a spectacular fashion. But nor is it Lifco, yet - an iconic Swedish compounder which Fredrik used to run. 

Röko does not disclose individual asset metrics beyond “revenue at acquisition”... but in a market as transparent as Europe, that’s not an insurmountable obstacle. We parsed through public filings to compile 10-year P&Ls for 24 businesses representing 70% of Röko 2024 EBITA. (Note: in some cases we didn’t have the full 10 years of data. In others, we included multiple subsidiaries of the same group).   

Our key finding? Unexpectedly large variance in performance. Röko’s top quartile businesses appear to be compounding earnings at a 30-100% CAGRs. On the other hand, bottom quartile businesses are flatlining or even shrinking.

You would expect this level of dispersion from a growth equity investor - but not necessarily from a team of compounding MVPs, would you?  

Read on to learn about: 

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Röko is a prime example of a niche, but growing trend: “HoldCos of HoldCos”. Companies that superficially look like industry-agnostic asset-gatherers, but really are incubators of highly focused rollups: Are “HoldCos of HoldCos” Houses of Cards - or really clever capital allocators?

Along with Chapters Group and Constellation Software, Röko has perfected the art of using equity in platforms both as acquisition currency and as management incentive, while incurring minimal dilution at the TopCo (listed company) level.    

Here’s how this works. 

Step one, Röko matches a lucrative niche (e.g. car parts distribution for SUVs) with a suitable platform acquisition. Röko is happy to pay up - on average 8x EBITA, but often significantly higher. It almost never acquires 100%. 

Step two, the acquired platform’s management executes on a Buy & Build thesis. The bolt-ons are typically small and highly synergistic. The management continues to run the platform with a high degree of autonomy.  

Step three, the minority “stub” is subject to a put/call mechanism allowing the management to fully exit within 5-10 years of the initial acquisition. 

A good example of that strategy is Renovotec: a British company that has been majority owned by Röko since 2021.