Customer success software startup Planhat built a 100+ employee business over the last seven years without VC cash. But the bootstrapping journey is over, as it’s now raised a $50m Series A round to scale its customer relationship management (CRM) system — the second largest Series A round in the Nordics this year.
Founders Kaveh Rostampor and Niklas Skog have been on investors' radar for a long time, but it wasn’t until recently that they wanted to take outside capital. Their desire to scale even faster (the business is currently growing about 100-200% each year) necessitated the extra cash for sales.
“We love being bootstrapped. It forces a mindset that everyone and everything must create value. I think this culture and the incredible team we’ve assembled is far more valuable than the investment but it will help us push everywhere a little harder,” says Rostampor.
Planhat isn’t the only bootstrapped European startup that’s recently decided to take VC cash after many years doing without. And it makes sense given that VCs are sitting on record amounts of capital.
And, since these bootstrapped companies are usually further along in their journey, it means larger round sizes, even at Series A. German employee engagement platform Leapsome raised a $60m Series A last month after being self-financed since 2016.
In the case of Planhat, waiting to raise money has worked out well. Its Series A round was completed at a valuation of €490m, according to sources with insight into the deal.
In our mind this is very very early days for Planhat and more investors doesn’t necessarily mean more value
Previously, instead of selling equity to investors, Planhat opted to give equity to employees, who prior to the new round owned about 15% of the company. The Planhat founders believed that to build a great company they needed great people, and great people want to be compensated, either by great wages or by fair equity deals.
Planhat’s round is notable because it has only one investor participating: Sprints Capital, based in London with the Swedish managing partner Henrik Persson.
“We didn’t need more than one investor for this round,” says Rostampor. “We’ve talked to a number of other really impressive firms and there has been a lot of interest. This time, Sprints was the best partner and we’re very happy to be working with them.
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“I’m sure over the years we will work with other investors and are open to doing so, but though we're 100 people, in our mind this is very very early days for Planhat and more investors doesn’t necessarily mean more value.”
Sprints is an investor that usually flies under the radar, though it has stakes in some of Europe’s biggest successes, including British fintech unicorn Revolut, Lithuanian online fashion marketplace Vinted and Swedish marketplace for home purchases Hemnet.
Rostampor says Sprints’ prior investments in Intercom and Affinity were important considerations for accepting their capital, as well as feeling there was a cultural fit.
