Retail embracing AI, post-merger trends in France, strategies to revert too much dilution, and many more...
What's Up Tech? #141
Welcome to our 141st newsletter. It was written with 🖤 by Justine Pelisson and Angèle Sahraoui
In 2023, baby vc is proudly sponsored by OneRagtime which will fund enrolment fees for the 2023 VC bootcamps participants, to promote diversity and inclusivity in the VC ecosystem — giving everyone the opportunity to succeed, regardless of their background.
OneRagtime is a European Seed & Series A venture capital fund with 40+ portfolio companies like Jellysmack, Homa Games and Zenly.
Follow OneRagtime on LinkedIn and check their website!
Fundraisings from last week with Pigment
News from last week with Crédit Mutuel Innovation, Carrefour, and a new study from RaiseLab and BCG
Our content of the week by Sharpstone on how to go back from too much dilution for post-seed founders
Internship & Job offers of the week
Wishing you a pleasant read 🖤
📊 Pigment raised $88 millions to reinforce its American growth and replace Excel (🇫🇷)
Pigment, a French SaaS company which has developed a platform centralizing data to enable strategic decision making, has just announced its latest Series C round of $88M led by Iconiq Growth and including Felix Capital, as well as previous investors like Meritech, IVP, and FirstMark Capital. 💪🏻
Concretely, Pigment allows companies to budget, forecast and build flexible business plans based on real time and consolidated data to enable better strategic thinking and future planning. 🎯
The company, who already works with big names like Mozilla, Eventbrite, Figma and Airtable, is experiencing exponential growth especially in the USA — where it saw in 2022 its annual recurring revenue rise by 600% and its user has by a factor of 10!
The latest funding will be used to pursue its American conquest as well as invest in additional product innovation — including its new Pigment AI feature, born from a partnership with OpenAI to leverage a GPT-4 API to query data using natural language. 🚀
Pigment secures $88 million for its business planning tool that will make you forget about Excel
🚀 Credit Mutuel Innovation to double its investments in French tech startups (🇫🇷)
Great news for the French tech market! The Credit Mutuel Innovation (CMI), a subsidiary of the Credit Mutuel Equity, has announced last week that it wanted to significantly increase its investments in French startups — with an investment ticket ranging from €1 to €20M and an average of €4 to €5M for first-time investments — focusing on series A and B startups, with an even spread across the digital, healthcare and deeptech sectors. 🙌
The CMI, who is already a shareholder of 40 companies including Neobrain and Mentorshow, aims to inject 50 million euros a year to have its equity capital doubled to €500M and reaffirm itself as a leading national VC player and long-term evergreen shareholder.💶
🤖 Carrefour announces strategic partnership with OpenAI to improve customer experience (🇫🇷)
Big news last week in the generative AI race, straight from the retail sector!
Carrefour, a French multinational retailer and wholesaling company, has deployed with the help of Bain & Company and Microsoft a chatbot based on Open AI’s Chat GPT-4 technology — Hopla — to leverage natural language artificial intelligence for enhanced customer experience. ✨
Concretely, Hopla will:
- Assist customers in their daily shopping on the carrefour.fr website: providing suggestions based on customers’ needs and preferences, suggesting menu or recipe ideas, helping with the purchasing journey... 🛒
- Enrich automatically and at scale Carrefour brand product sheets (all of the info regarding the product, such as its description, content, features, pricing, etc..) to provide customers with more information on each product (there are already 2,000 products online today that were generated with AI). 💡
- Support internal teams with purchasing processes to enhance daily tasks (invitations’ draft, quote analysis…). 💻
As stated by Carrefour’s CEO, Alexandre Bompard, “integrating OpenAI technologies into what we do is an amazing opportunity: by pioneering the use of generative AI, we want to be one step ahead and invent the retail of tomorrow.” 🔥
Carrefour integrates OpenAI technologies and launches a generative AI-powered shopping experience
🤝 Trends and challenges of French startups’ acquisitions by major groups: key findings from RaiseLab and BCG (🇫🇷)
Since 2021, the number of acquisitions of French startups by large corporations has dramatically risen, exceeding today 100 deals per year. This testifies to the growing maturity of the entrepreneurial ecosystem in France, on both the startup and the corporate sides. 🚀
In a new study entitled “Acquisitions of French startups by major groups: from love at first sight to marriage of reason?”, RaiseLab and BCG examine more than 600 acquisitions carried out since 2013 with their objectives, implementation, and operational challenges in order to derive key best practices for how to successfully carry a merger integration. 📈
🔑 Some key learnings from the study:
- Despite a significant drop in the median deal value, the French startup acquisition market remains dynamic, driven by an increase in acquisitions by scale-ups and foreign investors,
- Acquisitions are motivated by 3 main objectives:
1. Strengthening the core business to accelerate innovation on existing offerings;
2. Expanding into adjacent fields to complement the core business;
3. Exploring new markets or products.
- There are 3 common integration models observed:
A. The stand-alone autonomous model: the startup stays independent in terms of operations but receives resources from the company to keep growing. The company has very limited involvement.
B. The targeted partnership model: some processes or functions of the startups’ operations evolve (such as HR management, finance,.. ) from business bridges created with the company.
C. The full integration model: all of the core activities of the startup are merged with the company’s activities to be conducted together. The startup is no longer an autonomous entity.
- Adopting best practices is essential in order to anticipate difficulties and optimize the acquisition’s success. A few mentioned are: the importance of asking all relevant business questions (respective vision, long term respective strategies, ..); the importance of choosing the right post-acquisition operational model for sustainable integration; the importance of “daring to breakup” and pivot, if ever a mistake was made.
In an uncertain economic climate, the RaiseLab and BCG study provides advices to startups and companies on how to successfully and happily get married, in order to safely move from the excitement of love at first sight into a sustainable, strategic, long-lasting marriage of reason. 🌱
Our content of the week is brought to you by our partner Sharpstone. Massive thanks to Charlotte Adam--Allais and Marie Aristide for having written the piece below!
🔍 A Too Significant Dilution in Seed: How to Go Back?
Entrepreneurs, following your early stages involving a significant need for capital, you quickly carried out one or more funding rounds to increase your capital. However, your capitalization table is now heavily loaded. The ownership percentage of the founding team is below the threshold you had set at this stage of development. If further funding rounds are planned, this situation will not improve. What are the possible options to restore the situation? 📝
Mechanisms for Dilution Reversal
Share buyback involves reducing the number of shares through the repurchase of the company's own shares. Of course, funds necessary for such an operation must be available. This strategy can be executed concurrently with a fundraising round, but the investor must be convinced of the benefits of the operation. Indeed, a portion of the funds will not be used to create direct value but rather to carry out this operation.
Deferred dilution through incentive conversion of convertible bonds (OCs) with variable parity is another option. The partners must agree, in a contract with the investor, on the conversion conditions based on various factors:
A presence requirement. It is quite common in this type of contract for the beneficiary to be a part of the company (employee, executive, president, etc.) at the time of execution.
Performance conditions. These can also take various forms. They can be related to economic performance (such as revenue growth, EBITDA, or net profit) as well as operational performance (such as achieving individual sales targets, hiring a certain number of key profiles, etc.).
Financial performance objectives directly linked to the investor's capital gain. For example, the contract will be executed with favorable terms for the executives if, upon exit, the investor realizes a capital gain equal to or greater than 3 times the invested amount.
If you want to dive into the full article (in 🇫🇷), it’s just here!
Internships
VC Internship - Creandum (London, Berlin, and Stockholm)
Jobs
Associate Deep Tech - Speedinvest (Munich or Berlin)
Associate - Redalpine (Berlin)
👉 If you’d like to discover more offers… you can check our job board just here. And if you want to submit a new job offer, you can fill in this form (or share it)!
Also, don’t hesitate to reach out to us at joinbabyvc@gmail.com. We’d be super happy to have you sharing job/internship offers, events or feedback with us! 🤝
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Take care, and see you next week,
The whole baby vc crew 🖤