French Big Data startup ChapsVision is often referred to as ‘Europe’s Palantir’ — and despite some of the controversies associated with the US firm, the startup’s founder Olivier Dellenbach finds the nickname flattering.
“It’s a good benchmark,” he says. “It enables us to measure what needs to be done to be able to get to [Palantir’s] level.”
With a market cap of $140bn — a similar valuation to Uber — and revenues surpassing $2bn, Palantir is still a way ahead. But ChapsVision, which similar to the US tech company offers software to businesses and governments to help them analyse mass datasets, is growing fast.
The five-year-old startup has 1,000 employees and is on track to make €200m in revenues this year, says Dellenbach. It is profitable on an annual basis, he adds, and has an EBITDA margin of 20% — €40m for 2024. Dellenbach declined to share the startup’s valuation.
This week, ChapsVision announced that it has raised €85m in funding from French investors including public bank Bpifrance and VCs Tikehau Capital and Jolt Capital. The money will fund what Dellenbach calls a “very aggressive M&A strategy” — which has seen the startup acquire 27 companies, thanks to a €100m fundraise in 2022 and a €90m round the year after.
The next step? IPO, says Dellenbach, without putting forward a specific timeline. And unlike a number of fast-growing European tech companies, the founder has no plans to go public across the Atlantic.
A European IPO
Last week, Swedish fintech Klarna announced that it is planning to file for an IPO in the US. That fits the narrative that Europe’s public markets notoriously struggle to convince some of the region’s most successful tech businesses to stay at home when they go public.
“I don’t buy it,” says Dellenbach. “The Euronext market, especially the large-cap market [for companies with a market cap that surpasses €5bn], is very dynamic.
“There are few tech companies, so there is a lot of demand and little on offer. So, I think Euronext will be a very good vehicle for us.”
Euronext is home to tech companies like French cloud provider OVH and music streaming company Deezer.
ChapsVision could technically be ready to IPO from next year, says Dellenbach — although it doesn’t mean that the company will list immediately.
For a business that pitches itself as a vehicle for European sovereignty and with such strong commercial links to the region, it would make little sense to consider a listing on the Nasdaq in the US.
“There is a key difference between Nasdaq and Euronext,” says Dellenbach. “Euronext is less tolerant of so-called ‘hyper-growth’ startups that have huge losses.
“If you’re a tech company with 40% growth but abysmal losses, Euronext isn’t the right vehicle. It’s not a model that works in Europe.”
Dellenbach says that ChapsVision is aiming to achieve 50% growth next year, with profit margins of 20-25%.
“We have financial metrics that show profitable growth and are adapted to the European market,” says Dellenbach. “So there is no issue.”
You can raise “very significant funds on compartment A”, he says, which concerns companies with a market cap of over €1bn.
European Big Data
ChapsVision launched in 2019 to provide mass data collection and analysis services for enterprises — to enable European organisations to use tools made in Europe when dealing with confidential or sensitive data.
“Our objective is to establish a lasting player that can help Europe with the challenge of sovereignty when it comes to data,” says Dellenbach.
Since it launched, the company has developed a number of use cases, ranging from customer engagement to cybersecurity and fraud detection. It now has 600 customers, which include high-profile multinationals like luxury conglomerate LVMH and retailer Unilever.
The company started taking interest in government use cases in 2020. At the time, the French security agency DGSI (General Directorate for Internal Security) put out a call for tender to replace Palantir, which it had been using since 2015, with a sovereign, made-in-France technology.
ChapsVision submitted a bid; four years later, the startup has won the first part of the contract, and is the only remaining runner for the second half — which will be officially awarded at the start of 2025. The company declined to specify the value of the contract.
Dellenbach says that since 2020, ChapsVision has secured “dozens” more government contracts — including providing AI-powered video surveillance during the 2024 summer Olympics in some of France’s regions.
Now, 40% of ChapsVision’s activity comes from work with government agencies, says Dellenbach — largely in France, although the founder says that the startup also works with “some” countries in Europe and in the rest of the world.
It’s a tough pitch to the public, which remains wary of Big Data tools. The use of video-surveillance technologies during the Olympics, for instance, has been controversial, with French NGOs like La Quadrature du Net frequently decrying the privacy implications of using such tools.
But Dellenbach says that the mood is changing. “The world has changed since the war in Ukraine, with what is going on in the Middle East, and so on,’ he says. “We’re no longer in a Care Bears world.
“I think people realise that we need these systems that enable us to better protect our vital interests.”
An aggressive M&A strategy
ChapsVision’s growth since 2019 is largely down to its M&A strategy — whether to improve its own technology offering, unlock new use cases or acquire customers in new industries and geographies.
Last year it acquired ACIC, a Belgian company building tools for video analysis. A few months later it announced the acquisition of Owlint, a French startup that scrapes and analyses data from the web.
Its plan is more of the same. “The M&A market is a growing one,” says Dellenbach. “Valuations have fallen and investors are more reasonable […] It’s a complicated period for sellers, meaning it’s a good time for buyers.”
Dellenbach says that over the next three years, the company plans to double down on pan-European expansion, with the acquisition of well-established local players in other countries across the region.
Read the orginal article: https://sifted.eu/articles/chapsvision-85m-fundraise-interview/
