French Tech Unicorns: How to Scale Finance for Hypergrowth
What’s going on under the hood of fast-growing scaleups? Who are their finance leaders, and how do these finance teams transition from being a key operator to a strategic business advisor?
To understand what it takes to achieve hypergrowth, we met the finance heads at three of the hottest unicorns in French tech.
In this CFO Connect Meetup,
These three leaders share their insights on the journey to CFO, and the role of the finance function in fast-growing environments.
3 finance leaders’ journeys to hypergrowth tech
To kickstart the conversation, we asked our guests for the paths to their respective positions. Interestingly, all three come from a background in M&A.
We dig deeper into their professional journeys, their current roles, and their experiences with unicorn hypergrowth from a financial standpoint.
Clément: from investment banking to Back Market
Before joining Back Market, Clément worked in M&A within the investing banking world, both in France and abroad. This includes the role of CFO at VeePee.
In 2021, Clément joined Back Market, a marketplace connecting hardware refurbishers with customers. As he explains, “we’re selling refurbished electronic products, which are as good as new, and sent to B2C customers.”
The idea behind Back Market is to provide an alternative to buying new devices. The company, which was valued at $5.7 billion in January 2022, has a threefold value proposition:
Better prices than new devices
The same quality standards as new on the electronic devices
An amazing customer experience
Back Market also aims to have a positive environmental impact, at scale. As Clément states, “when you buy a refurbished smartphone instead of a new one, you save the equivalent of 80 kilograms of CO2 emissions and the equivalent of 60,000 liters of water. So you have a really very positive impact on the world we live in.”
Back Market just closed a series E, and the company is now present in 16 countries, with 650 Back Markets all over the world.
About the finance team
The first finance hire was made three years after the company was created. Initially, the finance team’s mission was to set up accounting and processes, to ensure business was driven as safely as possible, in order to become scalable.
Today, his team accounts for 35 finance professionals. 7 people are operating on legal and tax, and the rest are spread across different teams: accounting, FP&A, payment and fraud, data analytics, business intelligence, as well as legal and tax.
His main challenge for the coming year? “We need to implement an ERP.”
Nicolas: from M&A to PayFit
Nicolas started his career over 20 years ago in investment banking. After several years of M&A (including at Groupe Casino), he joined Cdiscount (part of Groupe Casino) as CFO. Later on, he operated as CFO for Showroomprive, and then as CFO and CEO for Camaïeu. Two years ago, Nicolas decided to move from retail to tech, as PayFit’s CFO.
Created in 2016 by three French founders, PayFit is a SaaS player providing and digitalizing payroll for SMBs. Following a Series E round in December 2021, the company reached a post-money valuation of $2.1 billion. PayFit is present in Europe, including in France, Germany, the UK and Spain. The company boasts 6,000 clients, 800 PayFitters, and plans to hire 400 additional people next year.
About the finance team
“We had strong growth over the last two years, of more than 100%. And we’ve a lot of plans to grow even further. We've developed a larger team to create a FP&A that we didn't have before.
“Now, we have a full budgeting and forecasting process. We take care of the fundraising, cash management, and cash collection by ourselves. We’ve also studied the option to internalize accounting.
“And this year, we're going to implement a new ERP.”
Clémentine: from PwC to Spendesk
After graduating from a French business school, Clémentine spent five years at PWC, working within the transaction services department on due diligence analysis related to M&A projects.
Then she joined Spendesk’s finance department as Finance Manager. Today, she’s in charge of the finance team, which is still smaller than Back Market’s and PayFit’s. After raising $113 million in Series C funding in January 2022, the spend management platform has joined the prestigious ranks of French unicorns.
About the finance team
“The first finance person hired was our CFO. Then, it was myself as a Finance Manager, and we built a team together. We started with the basics: internalizing the accounting department, hiring our current FP&A Manager, and then developing both of those departments.”
Today, there are 7 finance professionals working for Spendesk, and Clémentine aims at hiring around 10 more people by the end of 2022.
But size doesn’t always matter! As Clémentine says, “we’re still quite a small team, but we’re definitely efficient. We already have an ERP implemented (NetSuite), and nice reporting tools. I think we might be a bit ahead compared to some of our peers.”
When to hire a CFO
When asked when is a right time to consider hiring a CFO, our guests share two valuable pieces of advice. Nicolas recommends planning for this key hire as early as possible.
“It's better to draw in quite early. I think it has to be when you create foundations, because if you don't have the right foundations, you can have problems in the future.”
For Clément, a CFO should be the key component to transitioning the finance team from an operational role to a more strategic, business advisory role.
As he mentions: “There’s this kind of evolution of the finance team, where initially it's about making sure that our account team is right and that we’re able to report some figures. Then, it moves to a more strategic position, driving the business and the growth of the company, and becoming a real business partner.
“In my opinion, this is the right time when you have to equip yourself with a real C-level profile for the finance team. This person needs to be able to ensure you’re growing with the right processes and tools, but they also need the capacity to project finance out of this initial scope, to make it really a key player in the way business grows.”
How can CFOs become trusted business advisors?
Relationships between the CFO and the executive team or the CEO are always a key topic for finance professionals.
For Clémentime, building a strong relationship with the leadership team is essential. To make it happen, she strongly recommends thinking of ways to interact and collaborate. This can be during meetings, through Slack or via email…
She also highlights the importance of actively seeking collaboration, and being able to put yourself in other team’s shoes. “It’s all about understanding their needs, and being able to support them on a day-to-day basis.
“For example, we’re currently working on aligning the finance team, the data team, and the people team. This way, we can anticipate attrition, and be all aligned on the data and the objective. It’s important to ensure we always have the same level of information, and to have it up to date anytime.”
For Clément, “it's all about trust and communication.” Finance leaders also need to educate other teams on the finance challenges their companies can face, and how the finance team can help unlock further growth.