5 tips for selling your startup to a large group
WayKonect has just announced its takeover by Total. Created in 2013 by Yassin Korchi, Christophe Lossois, Jonathan Schmidt and Anthony Jarosik, the startup has developed solutions in SaaS mode for intelligent and connected fleet management for companies.
The WayKonect market, and in general everything related to the connected vehicle, is booming. It is a large market (more than 30 million professional vehicles in Europe, of which a small part is equipped), in strong growth and which is strategic for many players for whom it is the means of keeping in contact with the end customer. – and therefore to solidify the relationship. A clear sign that over the past 18 months, car manufacturers and suppliers, long-term rental companies, insurers, car repair chains, mobility players, etc. and fuel card managers have entered this market.
The market was therefore consolidating and, for WayKonect, to continue alone would have required colossal means. Once the decision to ally with a corporate was taken, we therefore looked for the one with which the creation of value would be maximum.
Very quickly, Total proved to be a serious candidate.
Access to Total’s customer base and its large sales force is an undeniable asset for accelerate the growth of WayKonect, in a business where sales cycles are very long (6 months to 1 year).
For Total, this is a strategic area of growth for the Marketing Services division, which wants to develop non-oil revenues and support its customers on global mobility and fleet management solutions. In addition, developing a technology as advanced as that of WayKonect is not always easy for a large group which must quickly position itself in a rapidly moving market.
However, until now, if Total had made a lot of acquisitions, it had hardly acquired any startups, especially technological ones.
In the end, WayKonect is backed by Total and the founders remain in the adventure to accelerate its commercial development and integrate the product into Total’s offer for fleet managers.
From this adventure, we have learned five lessons that we share with you here, on how to sell a startup to a large group.
Have the best product
Let’s not forget, what a large group looks for most of the time when buying a technology startup is a unique product (and / or that it cannot develop internally), and the team that is originally.
In the case of WayKonect, the team invested heavily in their product before bringing it to market. The product was designed for the customer (the company) as well as the user (the driver). However, many competitors have launched with a semi-finished product, which has damaged their reputation. For a large group, reputation is key in thinking.
Talk about yourself
As we have said, reputation is important. But just as much is the projected image; it goes through symbols that relate to communication, as through pro-commercial activity
WayKonect had participated in many competitions and won the 2016 Tour de France Digitale while being part of Euratechnologies, one of the most prestigious incubators in Europe. In the wake of the Tour de France Digitale, the startup had raised funds from three prestigious funds (Partech, Breega Capital and 360 Capital Partners) and business angels, including Thierry small and Olivier Mathiot. In addition, WayKonect had initiated commercial discussions with several groups, including Total.
Find the right internal “sponsor”
To sell a startup to a group, you have to identify the right sponsor / internal project leader who will have the legitimacy and support needed to convince decision-makers before starting the (possible) transactional phase.
For WayKonect, the sponsor was the sales director of Total Marketing Services. We started with product demo workshops to showcase the team, then a visit to the premises at Euratech, and so on …
You never get a second chance to make a first impression
More than anywhere else, the first meeting with a group is crucial. It is in this meeting that the group will form an opinion on the team, the compatibility with the internal culture, the character of the founders (the famous: “Are they manageable?”).
For WayKonect, this was all the more important since Total had already met other teams in the same niche. So they already had their minds sharp on what they wanted – and what they didn’t want …
Surround yourself with good advice
You will say to yourself that it is the moment of self-promotion, but it is nevertheless crucial for the founders and the shareholders in general, to be surrounded by experienced counsel, representing exclusively their interests. Each transaction is unique, and standardized processes do not work well with large groups.
Without going into the details of the deal, in the case of WayKonect, it was necessary to adapt to the processes of a large group (which are not those of a startup …) and to defend the file which went up to the Executive Committee of the group. Faced with such circumstances, for a team of founders (whose average age is 29), the balance between confidence and humility is not easy to find. It is therefore essential not to go alone on board …
Benoit Perrin d’Arloz, Partner at Raphael Financial Advisory.