efounders Reaches $2 Billion Portfolio Valuation - Startup News

eFounders Celebrates a Decade of Building B2B SaaS Companies

The European startup studio, eFounders, has reached its 10-year anniversary. This milestone is marked by a significant achievement: the collective valuation of its portfolio companies has soared to $2 billion. This accomplishment comes just 18 months after the portfolio first reached a $1 billion valuation.

Focus on the Future of Work

eFounders concentrates on constructing the future of work through the development of B2B SaaS startups. Their primary emphasis lies on enhancing productivity and streamlining workflows. Notable companies like Front, Aircall, and Spendesk all originated within the eFounders ecosystem.

Several successful exits have contributed to eFounders’ overall valuation, including TextMaster, Mention, Mailjet, Hivy, and Briq. The valuation associated with these exits remains fixed at the time of their respective sales. However, Front, Aircall, and Spendesk hold the potential for even greater future success.

A Different Approach to Startup Creation

“When we began in 2011, the prevailing model was exemplified by Rocket Internet,” explained co-founder and CEO Thibaud Elzière. “We admired the entrepreneurial drive, but disagreed with the underlying philosophy.”

Rather than simply replicating Rocket Internet’s strategy, eFounders implemented substantial alterations to the business model, focusing on three key distinctions:

• The studio prioritizes the generation of original startup concepts, avoiding direct imitation.
• eFounders seeks collaboration with genuine entrepreneurs, rather than consultants transitioning into entrepreneurial roles.
• Portfolio companies are designed to achieve independent operation within 12 to 18 months.

The eFounders Model: A Third Co-Founder

Upon conceiving a new project, eFounders functions as a crucial third co-founder. The studio actively seeks out a CEO and a CTO to lead the venture. In return for a one-third equity stake, the eFounders team provides essential support to launch the project. Once the startup secures seed funding, eFounders transitions away from daily operations and concentrates on initiating new projects.

This approach has proven effective. Currently, 30 portfolio companies employ a total of 1,500 individuals. These companies collectively generate $131 million in annual recurring revenue.

Scaling Challenges and Future Expansion

Looking ahead to the next decade, Elzière believes that simply increasing the volume of projects is not a viable path for eFounders. “This is a model that isn’t scalable – it’s meticulously crafted,” he stated.

Expansion will occur in two primary ways. First, eFounders will broaden its focus to encompass additional industry verticals. The partnership with Camille Tyan, responsible for fintech projects, exemplifies this strategy. Further specialized studios focusing on areas like blockchain and AI are also envisioned.

“We aim to maintain our concentration on B2B software, specifically targeting the long-tail B2B market, rather than large enterprise solutions,” Elzière clarified. “We don’t aspire to be a general-purpose studio, but we can cultivate specialized expertise in specific domains.”

Investing in the Next Generation

As successful eFounders companies experience liquidity events, the studio intends to reinvest a portion of the proceeds into other ventures. This new eFounders fund will concentrate on seed investments in SaaS companies, adopting a hands-on approach.

Increased capital is becoming increasingly important, as the complexity of building SaaS products has grown significantly.

The Rising Cost of SaaS Development

“Developing a SaaS company today is considerably more complex and expensive,” Elzière noted. “Users of platforms like Notion now expect rapid loading times – under 100 milliseconds – and this expectation extends to both consumer applications and SaaS products in terms of performance, design, and overall user experience.”

“Companies are raising larger amounts of funding not only because capital is readily available, but also because building a high-quality product requires more time and a broader skillset,” he added.