Meet Nicolas Debock, Investor at Balderton Capital

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.