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Meet Nicolas Debock, Investor at Balderton Capital

January 26, 2016

This is the third of our series of interviews of European VCs investing in SaaS and we chose Nicolas Debock from Balderton Capital — [read…

This is the third of our series of interviews of European VCs investing in SaaS and we chose Nicolas Debock from Balderton Capital — [read the previous interviews here].

Nicolas has been investing in SaaS for a while now. Prior to joining Balderton, he was a Senior Investment Manager at XAnge, a French VC fund, covering C2C marketplaces, Fintech and SaaS. He kept these areas of expertise when he joined Balderton in 2014.

Balderton Capital

Created in 2001

Office: London.

Investment thesis: European early-stage startups; Seed to Series A from $1M to $20M.

Investment focus: Usually in startups that show more than $50K of MRR (more often around 100K-200K) and 10-30% of month-over-month growth.

Assets Under Management: $2.3B

SaaS portfolio: Cloud9, Contentful, Opbeat, Qubit, Recorded Future, Rentify, Talend, Workable … and since yesterday Aircall:

We actually made this interview a while ago — before the awesome news for Aircall!

Insights from Nicolas Debock:

Why do you invest in SaaS?

As an investor, I look for SaaS companies that can scale thanks to the smart technology they develop. In addition, I think interesting enterprise software companies usually go after pain-points that are common to most businesses. In other words, a good SaaS solution is useful whether your business sells tires in India or services in Sweden.

SaaS startups are also the easiest to quantify: there are metrics for everything, even valuation. I see startups’ growth data as a bathtub: MRR is the water level, growth is the actual tub, and churn is the drain. As a consequence, it’s fairly easy to compare two SaaS startups.

So, in my opinion, investing in enterprise SaaS is relatively straightforward. Investments in other sectors are more abstract (on-demand economy, marketplace, fintech for instance), there are many different ways to tackle these massive trends.

What makes a good VC for a SaaS startup?

A VC who invests in SaaS should, above all, know the SaaS market very well. First, because it moves fast, and second, because the onboarding processes are getting better and better. A ‘SaaS VC’ should be more analytical than any other investors — a small variation of a churn-rate can kill a SaaS company quickly.

After they have invested, a SaaS VC needs to help companies build a sales team to upsell and go global. At Balderton, we have a deep experience in building strong sales teams thanks to the background of our partners.

Also, further down the line, a VC should be willing to help and give advice on following rounds of funding, especially as SaaS can become quite cash intensive on the ramp-up.

Do you consider yourself to be in competition with U.S. VCs for SaaS startups?

Yes. SaaS companies are inherently global, that’s one of the reasons it scales so well. As a consequence, every single investment has global potential. We see more and more U.S. investors going after European SaaS startup — this is good news, it means Europe is producing great companies!

What’s the n°1 startup that you’d like to have in your portfolio?

Slack. 100% of the startups I see are using it and it’s amazing how deeply it changes the productivity habits. I believe Slack will get into larger corporate organisations and become a platform for third party apps.