Hello friends! Axel from Gilion here.
Remember our discussions on the surge in M&A activity? Well, it seems the wheels are turning faster than ever. Recent developments include:
– Happy at Work, a Gothenburg-based employee engagement platform, is being acquired by Webropol, a Finland-headquartered HR company.
– Netigate, a Stockholm SaaS feedback solution for brands, has acquired Lumoa, a Finland-based startup pioneering "the first customer experience platform to offer generative AI". These acquisitions highlight the often under appreciated niches in employee/HR tech and customer experience tech. Both sectors are ripe for AI-driven disruption, crucial for firms navigating the digital/physical world.
These are also two sectors that we are happy to see heavily represented in the Gilion borrower universe, with two reference customers in: Hailey HR and Giosg and a few others that haven’t announced their Gilion loans.
Profitability Pays Off: French Unicorn BlaBlaCar's €100 Million Bet
We are passionate about empowering tech companies to leverage debt for startup growth. TechCrunch recently reported on French unicorn BlaBlaCar securing a 100mEUR credit line to fund acquisitions of smaller rivals.
BlaBlaCar, a stalwart of the French startup scene since 2006, shifted gears toward measured growth and profitability, enabling them to secure this revolving credit facility. A revolving credit facility, for all non-credit nerds out there, means a flexible credit line where a company has access to credit but borrows (and more importantly starts paying full interest rates) in installments.
This has enabled them to secure a €100 million revolving credit facility. The article states that the facility is meant to support acquisitions of smaller companies that fail to secure their next funding round. To me this is a really interesting example of how becoming creditworthy (pun intended) can add significant strategic flexibility and a potential huge strategic advantage through enabling M&A driven growth.
Debt: The New Weapon in Tech's Arsenal
This move underscores the potential of debt financing in driving M&A growth, offering a strategic advantage over traditional equity-based approaches. While equity funding remains an option, its limitations in dilution and valuation constraints make debt financing an attractive alternative.
Although we’ve seen quite a few startups achieve BlaBlaCar’s size, and a select few move to profitability, these types of debt lines remain really rare, so let’s hope that this is the beginning of a bigger trend, opening up yet more opportunities for important European tech champions.
Lastly, we were happy to see another Gilion customer announce our cooperation this week:
Recare secures €3.2M to help digitize patient after care in Germany
The Berlin-based SaaS-platform Recare, which effectively makes German healthcare better by facilitating structured collaboration between hospitals and care providers, just secured €3.2m in growth financing for their SaaS, with €2m coming from a Gilion growth loan. Recare has created a compelling and easy-to-use platform in a complex and regulated environment, marrying great technical ability with first-hand industry expertise.
Stay tuned as we continue to explore the ever-evolving landscape of technology and its financial ecosystem. And as always, do let us know if there’s anything you’d like for us to cover.
/Axel
