The Big Exit Show: Jeroen van Velzen (CEO) about the exit of Roadmap to Emburse


The Big Exit Show: Jeroen van Velzen (CEO) about the exit of Roadmap to Emburse

Following the launch of our very own podcast series, we now proudly release the second episode of the Big Exit Show! In this series, journalist and podcast-host Remy Gieling and our co-founder and managing partner Johan van Mil, talk to successful European tech entrepreneurs about the exit of their company.

In the second episode, we had the pleasure to talk with co-founder and former CEO Jeroen van Velzen about building, scaling and selling Roadmap – a SaaS platform for corporate travelling – to the American conglomerate Emburse earlier in 2021. You will learn why Jeroen does not read contracts before signing, how to navigate when realizing your product-market fit is not what you expected, and how to leverage your position in negotiations with potential investors.

The founders of Roadmap: Jeroen van Velzen, Markus Emmer and Koen Bavinck

You can find the episode at your favorite podcast platform, linked below. And, if you are really interested listening to the big exit of specific founders – reach out to us so we can invite them for a next episode!

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You can find the transcribed version of the episode below:

Remy: Ladies and gentlemen, welcome to The Big Exit Show. The podcast by Peak, where we talk to successful European tech founders about the exit of their companies, and the path, how they got there.

My name is Remy Gieling, journalist, public speaker, and podcast host. And our co-host is as always, the co-founder and managing partner of Peak, Johan van Mil. In The Big Exit Show, we will serve you with crystal clear formats, you will learn from Europe’s brightest entrepreneurs.

And we know your time is limited, so we try to keep it to 40 minutes or less. We talk about the origin story, about the growth phase, but more importantly – the exit. When do you decide to sell a company, and how do you execute the successful sale? [00:01:00]

For this episode we have asked Jeroen van Velzen, the co-founder and CEO of Roadmaps to join us. Roadmap is an award-winning SaaS platform for corporate travel, and Johan, you used to travel a lot pre COVID. Were you a frequent user?

Johan: Uh, no, I was not. No, I was planning too, but I've always had a lot of plans as you know.

Remy: Yeah, and they focus on corporates mostly?

Johan: Indeed, and I'm not so corporate.

Remy: Yeah. You have to work at a corporate to use their amazing software.

Let me introduce our honoured guest. He started his career as a management consultant. Ooh. Before deciding it might be a bit too boring for a lifelong career. Then he started his first company Mobile2Pay in 2002, sold it three years later to start Sound of Data. And selling this company 10 years later. In 2015, he started Roadmap, a well-designed, more compliant, truly traveler-centric support system, that leads to higher value for travelers and traveler managers.

It was sold this year, to the American conglomerate Emburse. Ladies and gentlemen, Jeroen van Velzen!

[00:02:00] Welcome to the podcast.

Jeroen: Thanks. Thanks for having me.

Johan: So, Jeroen. Good to have you here. What's the heroic story of Roadmap? What’s the heroic origin story?

Jeroen: Uh, the hero's journey.

Um, yeah, our story, the heroic story was actually that we found that in the travel industry, nobody gives a damn about the traveler. So, they care about filling planes, filling cars, filling hotels, but they don't care about the traveler because the money's in the bank, the minute you sell the transaction.

Johan: Yeah. Transaction-based, right?

Jeroen: Immense. Um, so with an app on your mobile, you can actually lengthen the customer journey. So we said, okay, well, the only way to talk to a traveler is using a mobile phone and, uh, that's the market we're going to grab. So that was the heroic story. A purely naive dive into a very big market. Yeah, let’s go – that was how it started.

Johan: So this is the heroic story, the story you often say, [00:03:00] right? If I read about you in interviews, or listen to you in podcasts. What was the real story behind it?

Jeroen: The real story was we had a company called Sound of data, and we were very big in text messaging here in the Netherlands. I had a company, as Remy told, Mobile2pay, And I had one of the earliest OTAs in the Netherlands as a customer. And, uh, the guy called me and he said, “Well, you're big on text messaging”. Because we did all the TV shows like American Idol, and Big Brother, that kind of shows. “Could you text flight times to travelers?”.

And we said, “Well, sure”. And that's how it started. So, uh, we started with scanning Ceefax, uh, you know, Teletext here and yeah, so we made a picture of a Teletext's page of Shiphol arrival times and departure times, and sent them to people that we OCR’d. And that was our database of real-time flight information. And that's how we started the company.

Remy: What's the first thing you remember about Roadmap, but what was the [00:04:00] first day like, do you remember?

Jeroen: It was crazy. Because, uh, we started in Delft, and our previous company was in Rotterdam. We said, okay, we're not going to stay in Rotterdam because most of the people, uh, live in the Hague or Amsterdam.

So we said, okay, we take a train, and we move up and get rid of all of the leased cars. And the first station we got out, that had a beautiful office. And that's what we did. It was actually the former chamber of commerce. It was open, it was clear, with this industrial feeling like, you know, full startup. Rental was like nothing.

And, uh, so a day later, we basically got into the office and, two weeks later we had 20 people. Yeah.

Remy: Many, many entrepreneurs who sell their company, take a while off maybe. Maybe some vacation, or a get-away with the family. Yeah.

Jeroen: Intelligent founders do, yes. Really intelligent ones.

It was like, okay. [00:05:00] And also because we really sold the other company to build this one, right. So the other piece was making a lot of money and it was in the autumn of its lifecycle, and this was like springtime and was full of energy. So yeah. Even if you would force me to sit on a beach, I'd probably kill somebody.

Johan: You mentioned that your wife, right, and your kids also said, now you have time for us.

Jeroen: Yes, they told me, but they also know, okay if this happens, if the fire's in the eyes – then go, go, go. But in the end it did backfire six or nine months later.

Johan: Looking back now, the first year, how was it like?

Jeroen: Yeah, it was truly crazy and in all of the, the senses and, and I think it was most crazy because we were beyond successful for a start up. Yeah, just start-startup. Right.

So in the first year we won the most prestigious awards in the industry. [00:06:00] Uh, we launched in the US, which is also weird for a Dutch company. We had no dutch customers, so we thought okay, let's launch in the US. And we signed up Pfizer as a first customer. Two years ago, we had to explain what Pfizer was. Their marketing recently has been really amazing.

Johan: How did you do that? Because that was, I think for me too, very interesting, right, the grit model that you always use. That you have a very clear dream and idea what your company should be.

And then you also, you named five clients, right? And three of them, you go on a board. Pfizer was the first one, apparently.

Jeroen: Yeah. And they were not a part of the five initial names actually.

Johan: Yeah. Okay. So how did you get a company like that on board? How did you, because you were a young company, not funded, bootstrapped at that time, with a big vision, very bold vision, three ambitious founders.

How did you get them on board?

Jeroen: Yeah, I think, you know, the heroic story is like, it's grit and etc. The real story is like, okay, well, let's try for the biggest companies. Okay, cool. Yeah. Why not? You know, totally naive, and not knowing anything about [00:07:00] enterprise sales process or whatsoever.

Remy: Where do you start? Do you just randomly look for people on LinkedIn?

Jeroen: Yep, basically that's it. Because in our previous business we've learned, when we started this online travel agency in the Netherlands, and then we had all of these agencies in the Netherlands as customers. Yeah. Okay. Now there are probably more in the rest of the world. Okay, cool. Let's go to LinkedIn and talk to these agencies.

And two months later, we were flying across Europe and we sold to all of these agencies. So then we learned.

Remy: And that was just cold calls and cold e-mailing?

Jeroen: Cold e-mailing. Back in the days, it was easier. We actually, uh, sent the CEO and the founder of LinkedIn, a box of champagne to thank him for all the business he created for us.

It was really funny. So I was a master of, uh, of LinkedIn marketing, before it actually got big.

Remy: Because these days you get just like spammed.

Jeroen: Yeah, but back then, you know, it was more “I got a message through LinkedIn, who is this?” And, uh, so that worked.

In the travel business, it didn't work. [00:08:00] I think Microsoft, which was one of the initial five. Um, when we landed the contract, we looked back, and seeing that I sent the travel manager of Microsoft 52 emails before he answered. 52 e-mails in a period of nine months.

Remy: And you knew you had to write e-mails?

Jeroen: Yeah, because I got “out of office” and that stuff, which is, yeah.

Johan: Putting in your agenda that you have to e-mail them again, right?

Jeroen: That's how it works.

Remy: It might be an interesting tactic to just like, uh, send the meeting invitation directly into a calendar. Maybe?

Johan: That happens. I get this.

Remy: Really?

But then you decline, so it does not work.

Jeroen: Yeah. We've done everything.

Remy: So perseverance is an important one. Uh, what did this gentleman respond after the 52nd time? Was it like, please leave me alone?

Jeroen: No, he actually was in the jury in the award [00:09:00] that we won. Really. So that was funny. So he was like, I think I know you, and what you do.

But, in reality, that's what it's about. Right. So if you paint a mental picture – and I really, really believe that the solution that we actually envisioned was for these types of companies. So I knew he had to buy my product.

Johan: And then, this was the corporate product, right. The one you ended up with. But you started in the consumer space?

Jeroen: Yup. We started in the online travel agency space. We still do. So still, Odigeo, who owns Opodo, goVoyage, edreams and Travix here in the Netherlands, are still a customer. And they have a lightweight version of the corporate platform.

Remy: How do you know what these companies, these big companies, are looking for?

Because you're running a small scale company yourself. So it must be a bit difficult to get into the minds of these high-paid [00:10:00] corporate managers.

Jeroen: Yes and no. So what we did, we went for a very visionary strategy, right? So we were painting a picture of what corporate travel would look like in five or 10 years.

And if you sell a vision, in which you can agree or you can disagree on, but if you agree, then the next question is, okay, so what are you doing about this? So, how are you playing to this strategy when, when you agree to this vision, and then they're looking at you “Oh, actually we're not doing a lot.”. Okay. So, what would you do if you had a magic wand? “Well, I would build a corporate app”. Oh, really? Would you? Right.

So, that is how we sort of floated that story in vision-selling, because there was nothing in that market. It was antiquated. Uh, you had very little innovation, there were very few suppliers that were dominating a huge market.

Remy: You mentioned that you had this vision for the corporate market.

And you also knew, I think that these sales cycles, [00:11:00] to get corporates on board, must take enormous amounts of time.

Jeroen: Yeah. We didn't know back then, actually, but.

Johan: And especially if you don't solve a direct pain, right. Because at that time, I think the problem that you had, actually, was a vitamin, right.

It's not a real pain. There was not.

Jeroen: So, Microsoft truly had a problem that they had a very complex travel program and they had no means to communicate with their employees. So they really had a problem. They tried to solve it themselves.

Pfizer did as well. So they were actually building their own app themselves. Um, and then we asked them, okay, so how are you going to find this out? How are you going to sustain that? Building an app yourself?

And we knew how hard that was, especially the travel space. So they did have a headache, but that was not a reason to have a market.

Then that's also where we hit a wall. When you meet two of those big companies, you sign them up and then you think, well, if Microsoft has it, everybody else has that [00:12:00] same problem. Well, It doesn't work that way. Right. So, that is something that really hit us after nine months or so.

And we were extremely successful in the beginning, and we were like unicorning all over the US. And then after nine months, yeah, you hit sort of like a brick wall. “Hey, there aren't like 50 of those visionary buyers in the market”. And then the real work starts.

Johan: Yeah. And what happened then?

After this period of nine months, after this successful period.

Jeroen: Yeah, and then you start to figure out, okay, you actually have to do stuff, because obviously we sold something that wasn't there. So that was painful. The second was like, okay, where is the rest of the market. And, uh, and how do you get that?

And, the third layer was that, I think that was sort of a year later, that we figured it out. And then we ran into a consulting, large consulting company, global consulting company that also saw what we saw, and also wanted to turn it into a consulting business, wanted a [00:13:00] piece of the company. And, uh, we got to the LOI’s, and that kind of stuff, but it blew up in our face.

And that was really hard, because they were one of our largest customers at the same time. And then they ripped the contract to parts when we didn't agree to their investment terms. And then, yeah, then we really were in a shitty place because then we blew a lot of money because we were bootstrapped. So we basically took the money off our previous business. Tossed it all into this one. So that was, yeah, growing and dying at the same time.

Remy: The growth phase.

Eventually you got these big names like Nike, Microsoft, as you said, Axo, AML, KPMG, Tom Tom. And I think that many startups are really listening to death and think, wow, I want that too. But it comes with a burden. I heard you say in another podcast that your contracts were like [00:14:00] 260 pages. Just to get them on board, right?

Jeroen: Yeah, Pfizer is a book. So, that was the first contract. Like, what the heck is going on here? But, it's like a ritual dance, right? So once you get the hang of it, it's just very predictable, right. Or there are no surprises.

I can, I can write a book about enterprise sales, you know, how you actually build those relationships. How do you, how do you close such a deal. What do you need to do. It is a way of doing business. And we found out the hard way, we were very naive, but luckily we were naive. Because if I knew in the beginning, I would definitely not, but at the same time, you know, it's hard to get in and hard to get out.

And we did so, in a very non-enterprise way. Right. So, we met Johan at a few occasions. Yeah. Typically we hang out at the bar, Johan can confirm.

Johan: Yeah, indeed. So am I.


Jeroen: And that's also how we do our business, and that is not the typical enterprise way. Right.

So we went to parties, we dressed up like idiots, in suits. Um, we went to our first conference, everybody was wearing a suit, and we were wearing t-shirts and we had models walking around. And what we wanted to do was do something within that enterprise environment. Okay – Let's do it in a human way. Right. So why do we have to treat each other as, as corporates versus corporate bullshit versus bullshit?

Just let's do business in a very human centric way. And, um, I think that that was a breath of fresh air to that entire market. Finally, you know, normal human beings. Uh, and we didn't read most of these contracts, and we were like, okay, we will sign it on the dot. And they were like, what do you mean?

Oh, we say, well, you probably put a lot of thinking in it, it's 270 pages. Probably it's okay, we'll sign it on the spot. Wow. Yeah, what do you want me to do? [00:16:00]

Hire a lawyer? It's probably taken me more money to hire that lawyer and to renegotiate a contract that is normally non-negotiable. Because that's another thing you can learn, you can’t negotiate contracts with these guys.

And that's the price you pay for doing business with Microsoft.

Johan: And then you mean the standard terms and conditions right? Of these players. Yeah, but you know, regarding terms in a contract like pricing, and….

Jeroen: Pricing is the single most important thing I would say. But the rest of it is pretty much non-negotiable.

Johan: So you always agreed more or less to their terms, because you wanted these brands.

Jeroen: Yup. And I have never opened up a contract after I signed it. And for all of those costumes, it's a ritual dance that is being created because of ass coverage. And, if you really look at it at what is, what is going on.

You know, the other, the other [00:17:00] story you offered to me is also that, you treat your customers like your friends, and that's actually what we did. So that's how we got them in, but that's also how we treated them going forward. So, and that was very consistent with the initial stage of the relationship as well.

So therefore, yeah, even if a relationship goes sour, then we also say okey let's end the contract.

Johan: It's funny that you say that. There's one expression I learned from founders, especially from serial founders. I know you don't like that term, right? But this is your third company.

And there's a theory that, you know, at the first company you make a lot of failures, et cetera. Then the second company, you will do everything which is completely opposite. And the third company is the most successful company, because then you really found your drill, right? You know, the edges of both sides.

And, then you find your perfect way. And is this the perfect way you run a company from your perspective? Is it to hustle your way in – act completely different, read no contracts, walk in [00:18:00] crazy suits, stay at the bar with clients, et cetera. Is that the conclusion of your first two companies, about how you start a successful company?

Jeroen: Yeah. Well, what we learned in the second company was toxic culture, right? So I think what led to our craziness, which to us is natural, uh, and about “full self”, right? So that is a term that has become bigger.

But when we started, uh, it was the first page of our cultural manifesto. We had no business plan, but we did have a cultural manifesto. And then we said, okay, you bring your full self to work every day. And that was the rationale, also by not taking yourself too serious. Right. So, because we're full of failures and, and we are crazy in the end. And so therefore, why hide that?

Let's put more lights on what we typically hide.

Remy: It was going very well for five years or so. And then all of a sudden there came [00:19:00] this small pandemic.

So let's go back to the early days of 2020. All of a sudden you start hearing these rumours that there is this virus spreading.

How did you react?

Jeroen: Uh, denial. So, that's a first principle of a big crisis – it is denial. Uh, Nike is huge in China obviously. And, um, our main contact for Nike, uh, is based in shanghai. So, yeah, we learned about this very fast, and also with the closing down.

Johan: And then when did you, when did you hear in time?

Jeroen: I think it was, uh, December. It was before Christmas. And then, in January you say, okay, this is this tiny thing, and let's keep it the tiny thing. And then at the minute it starts spreading, and then it's done. It's what's crazy because, and then also what we saw in the consumer markets, right, that was like a highlight, like, boom.

It just immediately went from, I think on average, we did 30, 40,000 bookings a day and it went to 0, right. [00:20:00] So that's like, as it's immense. You can't imagine what that's feels like. So, yeah, the first thing that we did was figuring out, okay, how long and how deep is this crisis?

And we were signing up a lot of customers at the same time. They were probably going to hold all of their projects. So yeah, the first thing that we did was to basically get rid of the implementation teams that we just hired, which was extremely painful because we all know how hard it is to hire the right team, which is probably 50% of the time being spent.

So that was a hard one. And then the second was to basically get all of the support that we could, from government, and also what tech leap was doing on the COL, which was actually our lifesaver at that moment. Um, so that's how we [00:21:00] basically navigated the first crisis. But it was, it was very very hard.

Remy: Because how was your revenue model structured? Is it like, is it like a fixed fee that these companies pay or is it per booking?

Jeroen: Most of them do. Some of our earliest customers, they were actually on a per transaction basis. So that went down to zero as well.

And all of the consumer stuff, which was still 40, 50% of our revenue is actually booking based. So that is on a pure transaction level. So we, I think overnight we probably lost 45% of our revenue. Which wasn't the hardest problem. The hardest problem, especially in the growing company, was that these implementations got holded.

Because you know that our sales cycle is 12 to 14 month. So it takes you a lot of time to actually get those contracts in. And then you start implementing, which takes another six to eight weeks. And if that stops, yeah. Then also your future cash stops. So, that was the growth machine.

Johan: And probably at that time you took the contracts which you signed, but didn't read out of the [00:22:00] closet, right. And then look at when will they start paying, right? Or, what were the contract standards? Did they have to pay only after implementation or what?

Jeroen: So we had a fixed time on the minute you sign, and then we start invoicing a fixed fee.

Johan: The American model?

Jeroen: The American model.

But at the same time, I'm not going to charge for something that you're not going to use. Right. And there was also that I'd rather have these companies beyond this crisis, because back then, we said, okay, we'll be flying out this September again, right. So it's a three, six month delay. Let's take the delay because the cost of sales is so much higher than, uh, yeah, basically wanted that money right now.

So that's also what we did. And we learned.

Johan: Did you actively contact your clients and said, we're going to pause the subscription?

Jeroen: Yup, the strategy was no churn. So we did not want to lose a customer on the pandemics. So that was rule number one, no churn.

And rule number two is get all of the cost outs that we didn't need. And rule number three is get more cash in, right?

Johan: Because your revenue then went to more or less zero, right? Because half the booking revenue went away, and the other half was subscription-based, and you ended that yourself. So your revenue was close to zero that year?

Jeroen: The big companies, they kept us afloat. So, actually some of those, they actually went as far as prepaying the contracts for free. Wow. So yeah, that was, that was really, really, really cool. Which is also a tell of how this industry works, if you do it right.

Right. So they said that “You guys are vital also in the return of travel. So therefore, yeah, you guys need to keep a float and we'll take care of that”. Um, so, so, and that was also very heartwarming at the, at the same time.

Remy: The exit phase.

You learned from previous companies, what it is like to sell a company. [00:24:00]
Was it the same, all three times?

Jeroen: No, definitely not. In the previous company we had a, uh, we had a shareholder conflict. So the reason why we exited was that the shareholders wanted something else. So one part of the shareholders wants to invest in future money, and the other part of the investors wanted to cash in here and now. So that was a conflict. Uh, so therefore we, uh, we exited the cash component that we invested. So, that was a fight, there was a breakup. So the emotion there was very high, and it was very personal and it got ugly, but then we were really happy that we were apart.

So that felt, that was a different emotion. And the first one, that was basically a complete failure. So, um, I don't think it would be an exit, yeah, it was an exit out of misery.


Johan: That’s also an exit, though.

Jeroen: Yes, that’s also an exit. But not the financial exit that you would claim. But I think to John's point, that I think I learned the most in the first exit. Also to make sure, and make no enemies. Right. So treat your customers, even while you go down, you keep on taking care of them. Because, the first customer that we landed in the next company, was actually one of those customers of that first company.

So, the whole story is intertwined. And I think from an exit perspective as well, I always had a hard time when we were talking about investors. Okay. What's your exit strategy? I don't build companies to exit them. Uh, I never have, and I never will. Because I think infinite. Right. So, and also that's how you motivate the team, right. You motivate a team with an infinite dream. But, that's typically how motivate people. If I say, okay, we're going to end this in five years – My mindset completely changes. But from an investor point of view, yeah, you have to. [00:26:00] Because yeah, that's how you make your money.

Johan: That's also the reason why, you know, in the first phase of the company, you didn't want any investor on board, right?

Jeroen: Absolutely. And then also to that point, because I also know my timing is always off, tremendously. So in my first company, it was 20 years off. With mobile payment, maybe two years. I think with Sounded data for travel, it was probably off by 10 years. And here, I think it was off by five years, but we're getting closer. Yeah, we're getting closer, but still, yeah, I didn't know how much time it would take for the market to understand that this change was about to happen.

And then if you have an investor on board that says, okay, it is five years, quarter by quarter. I need you to double, double down. Well, I'm not sure whether the route that I'm currently taking, is the end route that we're taking. So, in the beginning, we were very reluctant to move down that VC path.

And at the same time everybody was knocking on our door. [00:27:00] Right? So all of these big VCs that were knocking on the door saying, Hey, what are you guys doing? Are you actually disturbing this multi-trillion dollar market space? And we're like, No, dude, we're just doing our thing.

But in the end it does dribble through, right. So you start to believe that you actually have to raise and you start drinking the cool-aid, which is, you know, founders watch that cool-aid – because you know, not everybody needs to raise.

Right. So, I'm a big proponent of figuring out how you can build a company without raising money, because ultimately that is what a company should be. And if you really have a fast growing machine, then yeah put as much gasoline in it as possible and raise as much money as you can.

But building a company to raise money or to exit it, it's stupid. But sometimes if you read all of the stories, that's what this whole industry is about. And, that's the same for exit. I think emotionally, there's no good or a beautiful exit [00:28:00], because ultimately that's not why you build a company.

But I do think that, if you are in a situation like we ended up in, it's also, yeah, counting your cards. And your options. Okay. What can we do? And in all of those situations, that has been the same. In the first one that it was, okay, let's kill the business. In the second one, okay, we got to bargain, “kill partners”. And, in this case, yeah, we got an offer that was too good to be true, looking at the situation that we were in and the alternatives.

Remy: Because in this case, the buyer contacted you guys?

Jeroen: Yep, yeah. So we knew the buyers, it was K1, the owner of Emburse. And the minute we won that award, I think a week later they were calling. Because these guys, they know the market, they scan the marketplace and they know all of the innovators, and they make sure they keep the relationships with these guys alive.

Remy: And the listeners may not know about big corporates, so [00:29:00] maybe not everyone knows Emburse. What kind of company is it?

Jeroen: So Emburse is an expenses/spend management company. So the minute you start traveling, we all got to fill in those beautiful expense reports. And what Emburse tries to do is to automate all of these layers.

So the ultimate goal is to basically remove expense reports from the payment to humanize work. They have 14,000 customers, 16,000, since we joined, um, and I think they have 900, people working for them globally.

Johan: It’s massive what they do in terms of transactions also, right, into bookings.

Jeroen: Yeah. Yeah. I think the spend through the platform right now is beyond 60 billion USD.

Remy: Say, how did they reach out? Did they like send an email? Did they call you?

Jeroen: Uh, yeah it started with an e-mail. It was an associate of a private equity firm that said, okay, we want to know what you guys are doing [00:30:00]. And, basically have a call.

Remy: And you didn't think too much of it?

Jeroen: No, it was five years ago. Uh, I didn't know. I wanted to know Emburse, to know Jack, and then the minute it starts to get interesting, you start building partner relationships. Um, and that's what you do. You do that with all of the VCs, but also private equity, also all of our strategic partners, all of the M&As for a potential exit candidate.

And that is a part of your role as a CEO. Yeah, to basically make sure that you have all of those people in your rolodex.

Johan: Did you do that also with your previous companies, that way building relationships, et cetera, on different levels and with different potential strategic partners?

Jeroen: No, not at this level. Um, but also because we have a very, you know, the travel space is extremely complicated and really fast moving.

And, therefore, I found it extremely important to be connected to most of the senior people of these large, uh, suppliers.

Johan: But you're learning [00:31:00] also from them, right?

Jeroen: It's free consulting. Also how they see the market space, and also how they look at us, right. So we were really a very disturbing entity in the market space, and we deliberately played that role as well. Uh, and therefore also got a lot of information on why people got scared. Yeah, so I actually liked that part a lot.

Remy: And what were some of the terms that you wouldn't want to negotiate about?

Jeroen: When they showed the interest of, uh, buying, I went out and immediately put out, okay, these are our terms for which we're going to negotiate. And if you can't agree to that, there's, there's no deal. There's no, there's no process. There's nothing.

So, that was the first story. Also to make it really clear, what the sort of surrounding, because it can take a lot of time out of your agenda. And there was one thing that I didn't have at the [00:32:00] time, because yeah, we were in a very in crisis mode.

Yeah, is talk about acquisitions and that kind of stuff. Right? So you have a lot of tire-kickers out in the market saying, okay, these probably these guys are probably distressed. Let's see if I can buy cheap. And that was, that was something that was happening. I said, if you can't get to a multiple that is double-digit on the future revenue, you know, stop bothering.

Johan: And you mentioned that to the associates, which called you?

Jeroen: Nonono, at a different level of organization. No. In the beginning, what we also wanted to do, is build relationships with the management team. Right. So, you know, as much as I like finance people, investors, yeah, they have… Ultimately, these guys love spreadsheets more than they love business.

And I'm a businessman. So I would like to talk business, and I want to talk to the management of Emburse, about what they wanted to do. And I don't want to talk to an associate that wants to look at my [00:33:00] numbers, because, ultimately, that's what they want. So, uh, what we did is build relationship on a management level to see, okay, where do you guys see this match?

But that was after, I said, okay guys, if I'm going to spend time on this, this is the zone in which we are talking. If you're not willing to do that, then, um, let's not waste time here.

Johan: And how much time did you spend until you put that message on the table? Right? How many meetings did you have?

Jeroen: I think we had three or four meetings.

Johan: And then It is a completely zoom-done deal, right?

Jeroen: Right. There's an end to end virtual deal.

Johan: Nice.

Remy: How did the contracts get signed? There's also digital or do you need to sign in person?

Jeroen: I dont know, I do not need the contract, you know.

No, jokes aside, it was all virtual.


Johan: And, what strikes me a little bit, because the first learning was, you know, with a deal with a strategic partner, that they can drop out, right?

And in this case, you are being approached by a company. It takes a bit of time. We all know that, you know. So we always know it takes a lot of time. Right? And still, you went for that single opportunity, right? You didn't put any other cards on the table?

Jeroen: No, and also because we still didn't want to sell.

Right. So, we were not selling the company, also because we were in this, uh, we were in a special place, because we have cash generated. So, we got to a breakeven point, so we didn't need to sell. At the same time our sales was going through the roof. So yeah, we found a validation in the market space and going forward, and we were pretty cool for them that we can get back to growth, which is a very [00:35:00] luxurious position to be in.

And if I then wanted to sell, I would say, okay, let's wait a while until we start flying again. Build revenue and then see if it still makes sense to sell.

Remy: Yeah. And what was the reason that you decided to sell it anyway?

Jeroen: Because of the Emburse philosophy, right? So what they bring to the market space and their philosophy, what they want to do, that was like a dream come true for us because, they see what we see. Uh, but from a way larger perspective, right?

So we only look at travel, but they look at all corporate spend. And we have built an employee experience platform, I won't share too much here, but yeah, you can imagine if you start combining those two powers, you've got something very, very interesting. So, that means that, yeah, we were basically going beyond what we actually wanted to do in the end, right?

So our end game, they [00:36:00] basically shortcutted it. So what we wanted to do in the end, was basically make expense reports go away.

Remy: What were some other parts of the deal terms that were non-negotiable for you? You mentioned the multiples, but also maybe something about culture?

Jeroen: Yeah. Well, that's hard to negotiate, right?

So that's something that you need to feel. Um, and that was the reason, we had a huge culture fit with the management team of Emburse. Even on a digital level.

Remy: Even without a bar?

Jeroen: Even without a bar. Probably that’s the first deal we ever did without a bar involved. Which was actually funny, because, there are moments in the negotiation that he said, okay, this is the moment that we're suffering from the fact that this virtual, because this typically was the moment we should have said “Great guys, let's go down in a bar” and let's see if we can, you know, get some pressure out of the negotiations and, yeah.

Right. So, and virtually walking away from a table is also not that cool. [00:37:00] I lost connection. I'm leaving this meeting.

Johan: And how did, because your investor Newion was also on board, right? As a VC, I know it's really important to have the right price and the right terms for a company, right? How did you convince Newion, especially, about this deal?

Because you had a strong fit with indeed Emburse, right? The cultural fit, but also the shared vision, which is ofcourse very good. But it's, you know, for a VC, the return and especially the money it brings down to the table, that's the most important thing. Besides a good fit. How did you convince them on this trajectory?

Jeroen: That wasn't that hard. Um, because we both saw where we came from, and, uh, that the other tour was going to be hard and will take more time. And the price was within the deal range that we negotiated upfront. That was the deal range that I also negotiated with NIEV and said, okay, if we're going to do this, can you live with a deal range like this?

Right. [00:38:00]

So, that's what we did. So yeah, the partners were fully aligned on that game. Yeah.

Johan: And how did you deal with, uh, because it’s good that they were aligned indeed on the deal value. How did you align on the other stuff? Right. Where a founder and the VC are not fully aligned with each other, right.

Especially if you stay there, you might convert some of your shares in new shares or whatever salary rights, some things always where you're not aligned. How did you deal with that?

Jeroen: Well, it created some friction in the process to be honest. Also, I wasn't fully aware of the fact that, you know, the investor prefers cash over stock. This wasn't a full cash deal, so it was cash and stock.

Um, also because we also believe in what Emburse wants, so that typically is not something that the investors don’t like. To have stock in other companies that they do not control, or can exercise any influence over the route of that company. So that is [00:39:00] something that's, uh, yeah, that you also have to negotiate with, with your VC about. But that's yeah, that's business, and you have to find a way to get out of there and make everybody happy again. And ultimately, it's always hard to please everyone. So yeah, we poured a little water there, and served it next to the wine… and then ultimately we didn't get drunk because yeah, there was water in the wine.

Remy: What was the best advice you got, going into the negotiations? Did you get any advice from someone or do you have any advice for the listeners?

Jeroen: I would always suggest hiring an advisor. Uh, for multiple reasons. In our case, it's about getting the emotions out, right? It is an emotional roller coaster throughout such a negotiation, but it's because it takes way longer, they ask way more information that you'll have available. It takes way more hours out [00:40:00] of your day. Um, and you get stressed out because you do not control this process. You can't, even if you think you do, you don't. Because, to Johans point, in the end, it's only about start bidding. So, um, that's the pressure, right? So, looking back, I always felt this pressure, like, okay, this is a possibility that it will break, right?

That creates pressure. Because in the end, yeah, you start to sign those LOI’s. And you start believing in that story as well. And we really got enthusiastic about that whole Emburse story, and really got excited about that opportunity as well. So yeah, there's a lot of emotion.

So I would advise to hire an advisor, and to split the emotion and the rationalities, a lot.

Remy: Now what's your personal plan for the near future?

Jeroen: I have no plan.

Remy: You still work at the company, do you?

Johan: Yeah, and that's [00:41:00] fascinating, right? Because the one other thing that I read, is that you're an entrepreneur because you don't like to be bossed?

Jeroen: No, yeah, you have a right, but I have a very, very, very nice boss. But yeah, it is true. I have an authority problem, uh, quite big. I made a commitment to myself that I want to stay at least 12 month for two reasons. One, is to make sure that the team integrates well. And second, that's also the plan on why we did this whole transaction also becomes, uh, gets to fruition, so that I find important.

But ultimately, um, I'm not staying because I need to stay. And, I don't believe that you should stay because yeah, you need to stay.

Johan: But you probably have an earnout, right? And you don't have an earn out because you converted your shares, right?

So you have an indeed, uh, I have a personal interest to stay.

Jeroen: Right. But at the same time, yeah, my [00:42:00] share is so small, that I also don't have the belief that I can actually influence something in such a company like this. Yeah. You know, we are a very small portion of their revenue. I think strategically we can make a huge impact on their future business, and that's what I intend to do. And at the same time, yeah, I am a visionary leader. Um, and yeah, that also should match with the rest of the organization and the needs of those organisms at the same time.

So yeah, if there's a match, we will see. And at the same time, I'm truly enjoying it as well because, it's a long time since I've learned so much.

When you get into this new environment, right? You get so much thrown at you of a new industry, that I also do not know that well, so that is what that is. That is what I like a lot, but I'm sick and tired of zooming all day. And especially, yeah, these guys are at the other side of the ocean.

So I can't wait to jump into a plane and meet everybody and really get the juices [00:43:00] flowing because, yeah, this is not going to fly like this.

Johan: What is the gift that you, because of what we see a lot with founders who exit their company, is that they bullied themselves completely off the table. Right? It's a lot of hard work, It's a lot of… and then when you finally exit your company, it's always good to give yourself some little gift, or a big gift – what did you give yourself?

Jeroen: So, there are requirements with the deal mark. So you have to pass it on to the next generation.

So, between signing and the negotiation, there were like, they needed a stamp from the SCC. And that actually kept the deal from, uh, from going through. So there were like six or seven days, and then we would say, okay, screw it, we're taking a plane. So I went to Bonaire and we hired a beautiful house near to the ocean. And, we just sat there for five days talking about Mark. Yeah. But, I, I haven't got myself, uh, crazy [00:44:00] cars, I don't like stuff.

Remy: Yet. After the midlife crisis. Maybe we'll talk.

Jeroen: Maybe. I don't like cars. I don't like watches. I don't have any expensive hobbies, but I like traveling. So, I hope to see a lot of the world, and do it with my family and kids, because that's what I enjoy most. Traveling with kids is one of the most beautiful things, because you get to see the world through their eyes as well.

Remy: Evaluation. Now, in this segment, we make an educated guess about the valuation of the exit. Um, you can only reply with the words correct, higher or lower

Colleague from Peak: In May, 2018 Roadmap raised their series A round from Newion. The series A round was around 4 million euros, and the founders contributed roughly 50%. So 2 million. Assuming that the dilution caused by the capital injection from Newion [00:45:00] was 15 to 20%, we can make an educated guess that the company was valued at around 12 to 15 million euros in their series A round, in May 2018.

Fast forward three years. Roadmap was acquired by Emburse in March, 2021. Interestingly, for us, Emburse’s competitor, Coupa software, acquired a similar company named Pana in the same month.

What can this tell us about Roadmap’s potential exit valuation? In its most recent filing with the SCC, Coupa said that they quote “paid aggregated cash of approximately 48.5 million USD, and issued roughly 24,000 shares of common stock for the Pana deal”. This puts Pana’s exit at around 55 million USD, or roughly 45 million euros.

Two important differences between Pana and Roadmap are:

1) Pana raised more money. They raised around 10 million us dollars during their series A in 2019, at around a 60 million USD evaluation. [00:46:00]
2) Pana was larger. They had around 80 employees at the time of acquisition, whereas Roadmap had only 25.

Here we have two competitors in the FinTech space, acquiring a travel tech startup in the same month. We know that travel got hit hard then. And we expect that these startups were sold with a slight discount, as proven in the Pana deal. Sales were struggling and current investors had shaky hands.

Seeing that Pana exited at a lower valuation than their previous round. And also taking into consideration that Dutch founders are generally more capital efficient than their American counterparts, we would guess that Roadmap’s exit valuation is around the same price as the valuation of their last round, or slightly more.

This would put us at around 30 to 35 million euros.

So, was the exit value higher, lower, or exactly right?

Jeroen: Okay. Well done.

Remy: Ladies and gentlemen, thank you so much for listening to The Big Exit [00:47:00] Show. We hope you enjoyed today's program. If you did, please subscribe to our show at Spotify or your favorite podcast platform.

And if you have any feedback, please send us a message to [email protected]. My name is Remy Gieling,

Johan: and I'm Johan van Mil.

Thanks again for listening. And we hope you join again at the next episode!