Exactly fifteen months to the day since our investment, we are delighted to share once again with the world that Vauban has been acquired by Carta – the dominant US market leader in equity management software.
Last year Outward announced its lead investment in Vauban – the end-to-end digital platform for alternate investment vehicles – and in the process did our very best to explain to the world exactly why we invested. This included our thoughts around how alternate investment infrastructure was stuck in the stone ages, the acute nature of the problem this caused for the market, our instant affinity with founders and best friends Remy and Ulric, and our conviction in their vision to build the modern infrastructure and network for alternate investments globally.
Exactly fifteen months to the day since our investment, we are also delighted to share once again with the world that Vauban has been acquired by Carta – the dominant US market leader in equity management software.
This is a very special day for both of Vauban and the team at Outward VC.
As investors, nothing motivates us more than seeing hungry and talented entrepreneurs - who naturally become great friends - achieve their ambitions.
Firstly, and most importantly, the acquisition represents an incredible achievement and outcome for Remy, Ulric, and their exceptional team of ‘Vaubaners’ and every stakeholder that played a part in the Vauban journey. As investors, nothing motivates us more than seeing hungry and talented entrepreneurs – who naturally become great friends – achieve their ambitions. If we can play a tiny part in that feat, then even better.
Secondly, the acquisition marks the first portfolio exit from Outward VC’s maiden fund in less than three years since its launch! Whilst we look at this important milestone with great pride, all credit will always go to the entrepreneurs we consider ourselves fortunate enough to partner with, and this is no exception.
...we had the best seat in the house as the team executed flawlessly to build the market leader in Europe
In the case of Vauban, we had the best seat in the house as the team executed flawlessly to build the market leader in Europe. Experiences such as this are invaluable for everyone involved, including investors who seek to both help and learn from entrepreneurs in order to better serve the community in which they exist to support. For Outward VC, this is to empower entrepreneurs seeking to build the most important fintech companies in the world.
In the spirit of sharing these experiences, we have looked back at the last fifteen months and attempted to summarise what we observed, solely from our perspective, to be the three most influential and impactful moments, decisions and characteristics of the business that we believe most contributed to its rapid success.
...I think my response within minutes of seeing the product was something along the lines of – “I can’t believe this exists”.
1) A truly best-in-class product
No matter how great your brand is, how clever your distribution strategy or how experienced your sales team, without a killer product you will only ever get so far. This perhaps sounds obvious, but we still regularly find ourselves surprised at how many founders overlook the importance of really nailing product before anything else. Creating a core experience so impressive, valuable and impactful to your customers or clients, and so incomparable to any competition, that it evokes an emotional response. In other words, the ‘wow’ moment.
To put it simply, Vauban hit this mark. Without wanting to repeat our why we invested piece, their platform transformed a process that was previously manual, time consuming (weeks or months), expensive (10’s of £k’s) and involved multiple parties (lawyers, tax advisers, fund administrators, banks, etc.) into one that was entirely digital and materially faster, cheaper and easier. For someone like myself who is no stranger to the pain of setting up funds and SPVs, I think my response within minutes of seeing the product was something along the lines of – “I can’t believe this exists”. When your product generates that level of response from clients, everything else suddenly becomes easier.
What was equally as important however to this transformational product, was the fact that this team of product obsessives who cared deeply about the client experience never rested on their laurels. Each piece of negative client feedback, albeit very rare, was taken personally by the founders and quickly addressed through upgrades and new features. In parallel with rapid commercial growth, the tech team completely rearchitected the platform’s back-end during our tenure to enable the company to ship new features at break-neck speed, which it did. The roadmap was always clear, and always set with purpose. In short, the majority of decisions were all centred around creating an unparalleled client experience through best-in-class product.
Constantly striving for product excellence ultimately proved key in enabling Vauban to drive new client growth almost entirely from client referrals and word of mouth, whilst also attracting a very high degree of repeat business from existing clients, with little to no dedicated marketing resource for the majority of their time as an independent company.
Vauban’s product achieved what all businesses should be aiming for – turning your customers and clients into a more effective sales and marketing machine than you could ever assemble.
We observed this level of focus, conviction and bold decision making throughout our time as investors of Vauban, but this is by far the moment where it was most evident and transformative.
2) Ruthless focus and high conviction decisions
As early-stage investors, we encourage founders to focus on identifying the small number of things they do incredibly well. Once they’ve found ‘the hook’, they need to throw everything at it.
Ask Remy and Ulric the question – “what do you think was the single most important decision you made as founders of Vauban?” and before you’ve finished the last word they will tell you, “When we stopped servicing hedge funds to focus solely on venture”.
Without context, this sounds perfectly in line with what we preach. However, to summarise why this was such an enormous call – 1) At the point in which they had closed their funding round, hedge funds made up 80% of a meaningful revenue base, and 2) they had only just closed their funding round…
We had complete trust in the team’s decision making and understood that this was not just a based on a hunch or theoretical exercise, as the early data from their venture product gave strong enough signals to support where the scalable, exponential growth would likely come from in the near term. That being said, it was impossible to ignore the fact that given the immediate and material loss of revenue, this was the definition of a make-or-break decision for the company.
To say we were taken back by the outcome is an understatement. In just two months, Vauban had made up the entire revenue lost from discontinuing the hedge fund product. Within a year, it had delivered multiples on the total revenue base.
We observed this level of focus, conviction and bold decision making throughout our time as investors of Vauban, but this is by far the moment where it was most evident and transformative.
Whilst the team represented many nationalities, backgrounds and personalities, there was always a common characteristic that combined them as a tribe - energy, intellectual curiosity and first-principle thinking.
3) The Vaubaners
Building a company culture that defines who you are and where you wish to go as an organisation is very, very hard. Hiring the right talent that raises the bar of the entire collective whilst also fitting within that culture – even harder. Given how common a problem this is for high growth companies (even successful ones), startups that appear to nail both always stick out as exceptions to the rule. There is also nothing we’ve seen more strongly correlated with exceptional company performance than overcoming these challenges. Vauban were one of these exceptions.
Anyone that has had the pleasure of stepping into their Shoreditch offices has no doubt experienced the enviable culture that is felt as soon as you walk in. Whilst the team represented many nationalities, backgrounds and personalities, there was always a common characteristic that combined them as a tribe – energy, intellectual curiosity and first-principle thinking. As the company puts it, a team of polymaths – individuals of wide knowledge, curiosity and discipline that best represent a platform sitting at the intersection of technology, finance, legal and design. We saw the team act as flexibly as one needs to when operating within a tough and competitive hiring market, but not once did they budge on these principles around cultural fit, which included seeing them pass on candidates that at least on paper most start-ups would class as dream hires! As a result, these principles built a cohesive unit that enabled the company to operate in a way that was also built into the DNA of the company – a desire to stay lean. Instead of throwing bodies at problems, the team always sought to optimise for efficiency, productivity and scalability.
I have absolutely no doubt that the pace of product development and commercial growth simply wouldn’t have been possible without the quality of hiring and retention that resulted from looking beyond logos on CVs and titles, and instead staying true to their core principles around people.
Here’s to the future
Whilst the above doesn’t even scratch the surface of our experiences of working with the Vauban team, it’s fair to conclude by saying that it has been a joy for us to be a part of the journey. If this serves as anything of an indicator, we are also confident that their future is even brighter as they join forces with a pioneering company such as Carta. We would therefore like to send our congratulations to the team at Carta on this exciting new chapter in their company’s story, and our sincere thanks once again to Remy, Ulric and the Vaubaners for allowing us to be a part of this special journey. We couldn’t be more excited to see what you will achieve in the years to come.
