🎙Last week our CEO Jonas Deprez had an interview with Start it @KBC.
Recently data analytics startup Daltix announced that Belgian retailer Colruyt Group had acquired a majority stake in the company as part of their strategy to better respond to customer needs. In the startup world we don’t see this type of corporate venturing deal every day. So why did Daltix go for corporate funding, and could it be something for your startup to pursue? This #WisdomWednesday Daltix CEO Jonas Deprez shares his insights into the ingredients that could make it work for you:
You’re combining products & services
The most common startup investors, venture capitalists, are often looking to invest in startups with very scaleable business models. For example, in Software as a Service (SaaS) products, which work with monthly licenses. Daltix’s data platform for real-time retail insights is a whole other animal. “The more in-depth we go with our customers, the better and more powerful the data becomes and the bigger the impact for the client,” says Deprez. “That’s exactly what our value proposition is. It also means that when we deliver the software, it always involves a certain amount of service. We want to keep doing that well too. It would be a shame if superficial service compromised the quality of a good product.”
Daltix’s previous shareholders and venture capitalists have now been exchanged by Colruyt Group. With these investors the expectations and focus would lay with growth and doubling/tripling the company’s turnover within a certain period, according to the classic funding model. Though Daltix has big ambitions, Deprez is going for “controlled growth” with long-term results. “Don’t get me wrong, we could have hit those big targets, but following a whole different model,” explains Deprez. “We would have had to create a standard tool which would be easier to sell (and easy to copy) and would therefore be replaceable. This would also demand a lot more resources in sales and marketing. We deliberately chose to take another route.”
You want to build a people-focused business
Anyone who has ever read an article by Jef Colruyt knows that the supermarket retailer is all about people. “Yes, we’re working on data and technology is becoming more ingenious than ever. But the people you work with, whether they’re your employees or your investors, are what determines your success,” says Deprez. “When I compare with our previous funding round, I notice that corporate funding is more about people. In our first seed round, we met with a few venture capitalists: now we had people fromC-level and some directors in front of us. It was important for Colruyt Group to see the people behind the company and form a picture of who they were partnering up with. They would have liked to visit our offices in Portugal, but of course that wasn’t possible due to corona. So we set up remote calls so that our contacts at Colruyt Group could get to know us better.”
Deprez admits that he was worried that the corona crisis would cause delays. While the plans had already been set in motion in Februari, the lockdown in March threatened to throw a wrench into the works. “Building a people-oriented business means being transparent,” he says. “Colruyt Group let us know from the outset that a few people involved in the decision-making process had to help run the stores, but that they still wanted to go through with our plans.”
You share the same sustainable vision
Perhaps the most important thing: everyone was on the same page. As with venture capitalism, a shared vision is important for corporate venturing. The consensus in the startup world is that you should look beyond the ticket amount that a party wants to put on the table, and see to what extent you have the same vision. “That’s the first thing we evaluated,” Deprez agrees. “It was clear right away that we had the same priorities. For venture capitalists, exit or growth in valuation is a main priority. Colruyt Group on the other hand is totally in agreement with our vision of long-term impact. I’ve always wanted to help retailers make more data-driven decisions, and that’s a long-term effort. It’s refreshing to feel that Colruyt Group agrees with that. They’re not fixated on short-term revenue.”
The supermarket group already uses data for their lowest price guarantee and to personalise customer leaflets. In the future the company wants to respond even more to customer needs. That means Colruyt Group will also become one of Daltix’s clients, but Deprez maintains that it wasn’t the main reason to join forces with the retailer. “As a corporate venture partner Colruyt Group lets me focus on what really counts for me: making a difference in the retail world,” Deprez explains. “Honestly, I’m a single co-founder, and preparing for capital rounds and so on doesn’t leave much time for my core business. For me that’s also part of having a long-term impact: staying true to your DNA as a founder and focusing on where you can really make a difference.”
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