9 Things Graneet Got Right To Be “Series A-Ready”
Some quick thoughts on the journey to PMF in vertical SaaS and why we’re doubling down on Graneet
Since Pawel and Christoph’s first investments in Clio ($380M raised so far) and Jobber ($100M Series D announced a few weeks ago) over 10 years ago, we’ve been partnering with multiple vertical SaaS companies digitizing mostly analogue industries across the years. More recently, we led the seed round of companies such as Nexthealth ($125M Series C), Amenitiz ($30M Series A) or Petsapp ($5M Series A).
A little less than two years ago, Ricardo and I started working with Graneet, a French company that builds financial management software for small construction companies, which make up the lion’s share of the European construction market. At the time, Ricardo explained our thesis here (Help builders build). The short story is that we believe that there’s an opportunity to build a mini-ERP for small construction companies and that Graneet has a shot at becoming this ERP over the next 5–10 years. The journey will be long but we both thought that it’s a journey very much worth embarking on.
Fast forward two years and the company has made very significant progress, so we’ve decided to lead our first Series A (in the history of Point Nine!) and to write a quick blog post on what they’ve done right since our investment. In the spirit of being concise (staying on brand), here are “9 things Graneet did right to raise a Series A” since our seed investment:
1. Grew development capacity
When we invested, Graneet had a handful of clients, three founders and less than 10 people in the company. It was clear to us that the company had early signs of PMF but that it had to be “strengthened”, partially by building a more complete product. If you’re interested, Christoph writes about what strong PMF means here (WTF is PMF). The first step was to increase the development velocity of the company. It took a few iterations to get there, but what the CTO of the company, Raphaël, did right, was to i) implement a recruiting process for tech people (and an ATS); ii) be open to hiring freelancers to increase development capacities quickly; and, last iii) open the company to hire (partially) remote developers. Fwiw, most P9 Fam companies are now open to hiring (partially) remote developers.
2. Found PMF through constant iterations of product features, ICP and distribution channels
Oftentimes, we tend to think that the journey to find PMF means that one day, everything will start growing like wildfire. This conception of PMF has been documented multiple times, especially in this blog post from 2011 by the founder of Segment (On Finding PMF). Our experience with vertical SaaS companies is that it’s more often a constant iteration of product features, target market segments and distribution channels that leads to PMF. In each board meeting, Enzo, the CPO of the company, would project this graph describing PMF and together, we would very closely monitor conversion rates from demo to close, market segment by market segment. At one point, i) the level of feature completeness of the product and our understanding of ii) the ICP and iii) distribution channels were such that each small improvement led to more companies adopting the software every month. Reflecting on this, finding PMF was more an iterative process than the discovery of one magic feature. Founders struggling in this phase, keep high hopes and keep iterating. You’ll get there :)
3. Was patient before scaling sales:
Another aspect of the search for PMF was that before pushing on sales, Graneet’s founders had a strong conviction about the features the product needed to have to reach a certain level of feature completeness. Early sales conversations helped strengthen that conviction by constantly testing this assumption with customers. Again, this was a good confirmation again that the lean startup methodology works but that there’s no point pushing (too hard) on sales (i.e., scaling) before the product has a certain level of maturity.
4. Hired full-cycle salespeople:
Once we had a good (still early) level of conviction that the product could be sold (without founder magic), JG, the CEO of the company started hiring full-cycle salespeople capable of looking after both lead gen and closing…
5. Hired a Head of Sales to hand over sales:
… and promoted one of them to Head of Sales to hand over the management of a growing sales team. If you’re interested in the profile of the sales pioneer at Graneet, have a look at Herbert’s profile or at Seth’s blog post on “Hiring your first sales leader”.
6. Hired a Head of HR
The first leaders of a company are usually hired between Seed and Series A. To support the growth of the organisation, JG also hired Victoria as Head of People in the company. Why? Christoph wrote about this (on Blogpost) some time ago: Why founders should hire an HR leader rather sooner than later.
7. Found two scalable acquisition channels
A usual framework we have internally is that we tend to invest when companies have early signs of PMF and help them get to GTM-fit, which happens when companies find one repeatable sales channel that’s ready to scale. That means we can invest more to scale growth through this acquisition channel. In this case, JG found two and is now hiring a Head of Marketing. If you think that could be you, please reach out!
8. Launching new product features and increasing ARPA
One of the great things about vertical SaaS solutions is that they’re often at the core of their users’ daily workflow. These often become their Operating System. Amenitiz is the OS of independent hoteliers in Europe, and Clio is the OS of legal firms. In Graneet’s case, the company started with financial management and expanded into expense management. This is just the beginning of a long product expansion plan that could lead them to become…the mini-ERP of small construction companies in Europe or even worldwide!
9. Started thinking about fintech features but in a non-dogmatic way
Speaking of product expansion, vertical SaaS solutions often venture into fintech by offering payment processing or factoring / reverse factoring solutions to their clients. That’s how Jobber is now processing billions of dollars. This usually has the benefit of expanding market sizes while improving the unit economics of the company. Payment in construction is a complex beast, but we are staring to se (some) light as to how Graneet could add a fintech component to its offering. More on that at the next round ;)
JG, Enzo, Raph and team, looking forward to pursuing the adventure,
Louis & Ricardo
