"How we bootstrapped €5k into a €100m exit": Sevan Marian: Co-founder & CEO at Fleet

0:00Sevan Marian:Hello and welcome back to the Scaling Europe show presented by Deal. I have got a very special guest today with some very exciting news. Sevan, co-founder, CEO of Fleet. What's going on? What's the news?

0:12Alexandre Berriche:Hey Seb, thanks for having me. So yeah, we are announcing a deal on Fleet, CapTable, that values the company 100 million euros. So yeah, thank you.

0:26Sevan Marian:it's amazing news like fleet's a great company is particularly interesting because you are of course bootstrapped um so you know it's not often that you talk we get to talk about big deals and valuations when it comes to bootstrap businesses um you know for those you don't know you do a lot like equipment leasing founded in 2019 french company can you talk about the nature of the deal what exactly is the deal who's coming on board what's it enabling yeah yeah so it's a

0:51Alexandre Berriche:Private equity deals. So, you know, you have two kinds of deals. You have VC deals for companies that want to raise money and put cash in the company. And usually VC deals are for companies that want to grow very fast and are not profitable and need a lot of cash in to keep growing and investing. And private equity deals, LBOs, it's for companies that are profitable.

1:20Alexandre Berriche:since we are profitable since day one at Fleet we are eligible to private equity so it's a minority deal the fund that comes in is a French fund called ESAI they are very tech DNA because we are a profitable company and a private equity company but we are very tech driven and we are growing fast so we have the same code I would say as a VC company. So ISAI originally is a VC fund. They are still a VC fund, but they also have a private equity fund called ISAI Expansion that invest in tech companies, but that are profitable. So it's a minority deal. They take a minority shareholder in the company and it's 100 % cash out secondaries.

2:14Alexandre Berriche:secondaries for me, my co-founder Alex, and the employees that have stock option in the cap table.

2:22Sevan Marian:We love to see it. Europe is doing more and more employee secondaries, enabling employees to cash out. We've seen it across Synthesia. We've seen it across Eleven Labs, Revolut. We don't see often bootstrap stories. This is an amazing result, I imagine, for so many employees. Are you able to touch on any amount of cash how meaningful is it like are every employees getting to cash out are you able to give a bit of like flavor to that yeah yeah so we allow all the employees to cash out 100

2:52Alexandre Berriche:percent of their shares and uh 100 yeah 100 of their shares of their stock options uh and the ones that uh stay for us stay with us for the next cycle we'll have a new stock options plan But for us, this is a very strong message that we want to give. So when you're a bootstrap company, you know, sometimes it's more difficult to attract talent, because you don't make headlines. You know, you are a little bit the underdog. Nobody sees you. And so, you know, you have to play differently to attract talent. I think we've been doing it quite well because we've been communicating a lot on LinkedIn and our success with my co-founder, Alex.

3:32Alexandre Berriche:But it's true that being able to say that we have more than like around 15 employees that will cash out more or less. I cannot give the exact number, but several million euros in this deal. It's great. It's a great story to tell. For us, I think it's also a great story for new joiners to tell them that, you know, with Fleet, stock option is a real money. and we have great stories of people that became rich thanks to us very young people so for us it's a very good message and yeah overall it's so I cannot share the exact number but it's several dozens of millions of the tickets overall is several dozens of millions so it's a lot it's a big ticket and yeah So it's a good thing.

4:28Alexandre Berriche:We talk a lot in Europe about how do you create value in this world. In France, we have a lot of public money, a lot of tax, and people are complaining a lot because there is low value creation sometimes. And this is a good sign when you are bootstrapped. With Alex, we put two and a half K six years ago in the company each, and now it's 100 million euro uh two-thirds of the revenue outside of france so yeah when you talk about value creation this is a real example no to transform 5k into 100 million without any

5:09Sevan Marian:debt or external funding that's amazing and it's also an amazing lesson for why you take the boot stretch route because because you haven't raised outside capital the cap table as is yours and your employees right so you are the the sole beneficiaries of of the hundred million dollar valuation and reaching hundred million dollar valuation when you own 100 of the business you know this employee and founder owned is a lot more valuable than you know potentially reaching 500 million but where

5:36Alexandre Berriche:you've been diluted and you've sold off a lot to to vcs yeah totally totally uh of course i mean i totally understand also companies that raise fund uh with vcs it depends on your business model the level of competition on your market many things, many factors in the case of Fleet we thought we would raise funds with VCs when we created the company me and my co-founder we come from a rocket internet group so we have a lot of entrepreneur friends that has raised money and back in the days in 2019 the natural path was to raise money but we found a special business model very efficient, very asset light, cash flow positive, both profitable and cash flow positive, which is very important.

6:24Alexandre Berriche:Many entrepreneurs, they look only at profitability, but sometimes you can be profitable, but you need cash to grow, you know. And so we've been able to design this very special business model. So, and we had an instant product market fit when we launched the company six years ago. So after six months, we were discussing a very advanced discussion with VC fund to raise a big seed round. But we sat down together and we said to ourselves, okay, we have a lot of money in the bank. We don't have... The more we grow, the more we have, you know, cash in the company. So why raising money, you know? Like, what's the rationale here?

7:04Alexandre Berriche:And I think it's been a very structural decision because since this day, we've been very disciplined in keeping this healthy business model, keeping this asset light business model being very frugal in our approach we've been very inspired by Amazon culture being very resourceful ask the same to our employees to be very entrepreneur in their mindset to build a very strong culture and you know, I don't know if you remember but in 2021, 2022 the VC money was all around the place In France, we were seeing big, big raising funds. And so we are seeing companies that was raising 30 million, 50 million.

7:50Alexandre Berriche:And that was smaller to us than us. So we were like hesitating at this time. We were like, maybe we shouldn't raise money. It's easy money, you know. And we made the right decision of not doing it because then in 2023, it was a big crisis. And still now it's more difficult to raise money. and so today you know it's uh the result of this now of uh staying very consistent in our approach and uh and i think we made the right choice for ourselves now um so amazing yeah it certainly

8:22Sevan Marian:seems that way and uh why was now the right time to to seek private capital private equity capital

8:27Alexandre Berriche:yeah several things first of all uh of course we we are 50 50 on the cap tables since beginning with my co-founder Alex. Alex is also doing a lot of side activities. So yeah, he's a very strong investor. He's a scout for Sequoia and he's doing many things. So he's less operational on fleet and he's less time invested on fleet. So we wanted to create a difference between us and the cap table because I'm more 100 % of fleet and driving the company on a daily basis as CEO. So bringing an investor, allow Alex to cash out more than me and to, you know, be less incentivized on the cap table for the next cycle.

9:12Alexandre Berriche:This is the first reason. Second reason is just that we want to bring this company from 100 million to 500 million. And since the beginning, we are two. We don't have any board. We don't have any, you know, like it's only the two of us. I think it's a good thing to bring a fund, to structure a little bit of board, to have a fund that already been there, done that. No, like I've helped company to go until 500 million and then 1 billion. So I think it's a good thing to engage a new cycle with a new partner and, you know, to have this ambition. And so a third thing is, of course, to this thing about employee, you know, to allow employee to cash out and also to give a valuation to the company and this, I mean, 100 million valuation.

9:58Alexandre Berriche:it's almost a coincidence, no? A great number, no? But so it was the right time to, yeah, to give this valuation and to give this stamp, no? So yeah, many, many things. Nothing very necessary, I would say, but many good things maybe. And just the right time. Right time, yeah.

10:16Sevan Marian:Amazing. You mentioned that the ambition is to get like a$500 million valuation. What's the plan to get there? You mentioned that a lot of your revenue coming outside of Europe. I think you also operate in the US now. Where's that growth going to come from looking forward?

10:32Alexandre Berriche:Yeah, so I think it's a lot of an execution play now. We've been opening a lot of countries. So there is a lot of upside, potential upside in just growing this country. In every country we open, there is a product market fit. So far, we didn't fail in any country. So yeah, I think in Europe, we have, so France is our historical market, but we are growing a lot in Spain, Germany, UK. We just launched Netherlands, Italy, and it's working very well. We launched one year ago, the US operated from Europe. So we have a big sales hub in Barcelona with a US team working in shift hours. After only 12 months, we are doing 6 million annualized revenue just in the US, which is big.

11:25Alexandre Berriche:It's growing very fast. So I think there is a very strong ambition to grow in the US also. We will probably open an office there and double our investment. So I think we can reach 100. The ambition is to reach 100 million revenue. Today we are at 30 million. So it's triple the revenue, a little bit more. We are growing a lot. We did 92 % growth year on year this year. so yeah I think it's a lot on a play on execution growing internationally first thing and of course second thing is to to increase the verticality of our products so today I think we are a very strong solution to procure manage and renew your device with a full stack service so you can deliver your computer everywhere in the world very fast you can pre-configure your computer so you have an automatic onboarding for your employees then during the whole lifetime of uh of your computer if there is any issue no matter where you are in the world you have after sales service you can repair replace your computer so you your company uh your employee keeps working keeps working and then you can renew very easily and off-board automatically your employee deactivate or computer remotely erase the data.

12:48Alexandre Berriche:So we manage very well the whole life cycle. And it's very strong for companies that have several offices, that have distributed team remote or in different locations, different countries. It's very strong. So I think there is a strong play here and we can reach 100 million because the market is huge. If you see a company like Deal or Remote that do employee of record in several countries, the market is huge. Deal is valued 17 billion, I think, after six years. So, yeah, I think there is a strong play on this market. But what we want to reinforce and invest on is also the software part, the cybersecurity part and the software management part, where you can also secure your device.

13:38Alexandre Berriche:If there is an issue in the usage of your device, like, you know, I cannot connect to the Wi-Fi or whatever, you can use our service to solve your IT issues. So I think it's a right moment to disrupt also this industry of managed service provider. With AI, I think we can do great things. So, yeah, I think it's both increase the verticality of the product and of course execute our play, which is already showing strong signs of growth potential.

14:08Sevan Marian:How is the new partner going to help you get to 500 million and 100 million of revenue? What value, what expertise are they bringing to the table that's going to enable you to accelerate even more?

14:17Alexandre Berriche:Yeah, so I think they have a very strong expertise in bringing company to this level of valuation. They've been working with many companies that reach even 1 billion, you know. So I think they have several things. First, a strong network, of course. Second, a very strong finance expertise to help us to structure. We are in several countries. We need to structure our finance, consolidate. So I think it's quite strong. And third thing, of course, is the ability to help us to do M &A, build-ups. Usually when you bring private equity investors, they also help you to build up by acquiring companies.

15:00Alexandre Berriche:So we're going to look at it now, build up strategy, which kind of player, in which geographies. But the idea is also to look at this.

15:11Sevan Marian:Amazing. And can you share some lessons, I guess? You know, you started, I think, with the COO and you've transitioned into the CEO role now. Can you talk about some of the lessons that you've learned from growing and scaling this business from, you know, as you say, five grand to 100 million?

15:26Alexandre Berriche:Yeah, yeah, of course. So I think overall entrepreneur lesson that I get from my experience, it's my own experience, but something that I would say to anyone that builds a company is when you're an entrepreneur and you want to build a business, you have a vision where you want to land, where you want to go. And I think you need to be very disciplined in some first principles, you know, like the big principles, you know, of your company. So for us at Fleet, we've been bootstrapped. We had some strong principles. For example, in our business model, it's very, very important when you're bootstrapped to stay very, very healthy in cash flow and profitability.

16:14Alexandre Berriche:And for example, one thing we, several things we said to ourselves, but like one example is like we are delivering computers to clients, But one thing is that we don't want to have warehouses, stop computers in advance and deliver clients. And along the way, we've been tempted to do it now because there's been a lot of crisis in the computer supply markets. with some ship shortage, for example, in 2021 after COVID or now with AI also. There is a lot of issues in these industries. So we've been tempted to deliver our clients faster by making some stocks. And we said to ourselves, if we start doing this, we will put our finger in something that we will not control and then we will change totally the face of the business and of the, you know.

17:12Alexandre Berriche:So some principles like this, it is not the only one, but some principles, you will be tempted along the way to find shortcuts and to like, you know, not stay very disciplined on this. So this, you need to be very strong on this. On the other way, on the other side, of course, when you're entrepreneur, you need to be flexible in the way you get there, no? Like there is a lot of unexpected thing. So you need to keep flexibility in our day-to-day. you know, day-to-day vision, no, but very disciplined in our big principles that makes your business and the success of your business. So this is really something that I learned from the fleet story.

17:52Sevan Marian:Amazing. And looking back, any regrets? Do you think, oh, maybe if we had taken VC Capital, we could have gone faster or gone bigger? Maybe, but looking at where we are today, I think it's, I don't have a... Things aren't so bad, I guess. Things aren't so bad. Yeah, I mean, it's amazing. Well, thank you so much for joining me. This is an amazing story. Congratulations on the news. It's an amazing result for both you and Alex and all the employees. So it's a really great story coming out of Europe and coming out of France. So thank you for sharing it with me.

18:19Alexandre Berriche:Thanks a lot. Thanks.