The Story Behind Backmarket's $120M Series C, with Pauline Sauvage
"When you see the values, you already know the answer. And this gives you a sort of handbook to handle the day-to-day things in finance."
Pauline Sauvage is a CFO as a Service. But rather than juggle a handful of clients at any one time, she prefers to serve as Interim CFO, to build the finance function and establish lasting routines.
Most notably, Pauline has acted as CFO for Backmarket, guiding the company through its Series C funding in 2020 (among other achievements). She’s also led finance teams at Beamy, Must, Erbium, and Linkfluence, with plenty more credits on her CV.
In this episode of CFO Yeah, we talked with Pauline about building the finance function for Backmarket, the differences between raising seed vs series funding, comparisons between the various companies she’s helped, and the importance of company culture in structuring finance.
Building Backmarket’s finance function
Backmarket is my second marketplace, but a lot of things have changed since working with the first - a used car company. Each organization is a different story. The idea was to get to know the business and understand the ops and tech side of Backmarket. I needed to see the risks and then put processes in place to manage those. It’s an audit process.
At the beginning, we had lots of risks with our different merchants, for example.
Processes are basically a mix of tools and people. Sometimes a tool is perfect - if there’s less potential value added you want a tool to automate it.
Then for people, you have questions around who you want to hire: a junior or someone more expert. The whole story of Backmarket is really of junior people who grow with the company. But of course sometimes you really just need an expert. And those people can be harder to hire, especially if they view the company as “just a startup” and don’t see the big picture.
When you hire, you need to find people with the right state of mind. Backmarket has such strong values, and I wanted to have people who were really in the “back office” state of mind: we’re here to help the company grow. That was so important.
Sometimes you meet real experts - really senior - but you just know it won’t work because of the people side.
The importance of company culture
For growing companies, culture is really important. When the processes and values - the North Stars - are really clear, you don’t have to ask the CEO questions all the time. When you see the values, you already know the answer. And this gives you a sort of handbook to handle the day-to-day things in finance.
With new hires, you’ve got to find a match. It’s difficult in tech companies because there’s so much competition. So the culture is a way to be different from other companies, and to attract the right people for this culture. And you want people who are motivated not only by numbers, but also the ultimate aims of the company.
Now, Backmarket has a full-time CFO. And there was a really nice moment at the end of our transition. He told me that the team I had built reflected my own commitment to building a high-performing team. He said, “I know who you are, because I’ve seen the people you hired.”
So, mission accomplished.
Raising $120M in Series C funding
We closed our Series C just hours before the first lockdown in France (May 2020). So the paperwork was a bit of a struggle. But the most important part of the due diligence was done before that.
It was done while I was still building the team, and there was no intermediary to help us. Frankly, it could have been an absolute nightmare. But everyone - from the young intern to the most seasoned professional - did a hell of a job.
When you have a story like Backmarket’s, it helps a lot. We had a very clear trajectory, and a strong ambition - it’s a very driven company. The idea was to keep expanding - the previous Series B was for the US, and this Series C was for Asia. So the goals were very clear.
We had a new VC (in addition to the previous investors): Goldman Sachs. And you have to be at the right level for a partner like that. It puts a lot of focus on the finance function. Before this - and before the covid crisis - we were doing a lot of reporting and forecasting for ourselves. But with the crisis, you’ve got to do it for the whole company. And for the new investors, it’s the same thing.
It’s not that we changed things, but suddenly there was a lot more exposure. Goldman Sachs are going to challenge you and ask questions, and that’s great.
The differences between raising a seed vs Series C
We’re still at the seed phase at Beamy. But I still feel like I have the same mission: help the business by giving visibility on the financial side, and help the company grow by building a great back office.
But at Beamy, I have fewer management topics to handle. And I’m more of a Swiss Army Knife at this stage. I don’t need lots of experts in the team - I just have to do lots more myself.
The goal is to work towards a Series A. Basically, I’m designing processes to pass the due diligence for this with success. So that’s this year. But the ambition is very big - we’re just at the early stage.
Why Pauline left the Big Four for tech startups
When I decided to join the “real world” after EY, I wanted to go into tech companies. You have to deal with a lot of things. But they’re growth problems, not restructuring problems. So that’s a nice thing about startups.
Also, you have a lot of engineers, and I love working with them. Plus, a lot of young people with ideas and ambitions. And they can be young in age but not so young in experience. There’s an attitude.
I like to say that I stay young by working with these kinds of people.
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