"There are great things ahead of us!", say co-founders of Integromat, a Czech startup acquired by Celonis for over $100 million
Integromat is a Czech startup that will go down in the history of the Czech startup world. For years, the company's team worked on an automation platform that offers unique solutions, bringing forth a change in automation processes so that everyone can manage it and routine work is no longer a daily concern. Their enthusiasm, efforts and results resonated on the European market and Integromat found itself in the sights of the German company Celonis, which acquired it for a dazzling sum in excess of CZK 2.5 billion.
How was the acquisition carried out, and what are the pitfalls and opportunities that it brings? What is life like for one of the few startup billionaires in the Czech Republic? How is such news announced to colleagues? And what was the most powerful experience for them during the three months that they spent in San Francisco in 2018 with the CzechAccelerator program? We discussed all of that and more with Ondřej Gazda and Patrik Šimek, co-founders of the Czech startup Integromat.
You recently became billionaires thanks to the sale of Integromat to the German company Celonis. What do you plan to do with the money? A well-deserved holiday?
Ondřej: Our acquisition was not an entirely standard type. More commonly in an acquisition, the larger company swallows the smaller one, takes over its technology and team, and transforms the original project into something completely different. In our case, it happened differently. Although we sold 100% of the company, Integromat continues to run in its original form, Patrik and I continue to manage the company and not only does Celonis not talk to us about it, it wants to support our growth even more by investing considerable sums in Integromat's further development. This was one of the essential reasons that we decided to sell so soon. We have a chance to continue working on our vision - to make Integromat the number one and standard in the field of cloud automation, with a strong partner behind it. Both of us are continuing to devote ourselves fully to the business and we don't even want to hear about retirement :). There are great things ahead of us!
Patrik: Personally, I see the acquisition rather as an exchange of shares. As Ondra has already said, in addition to shares in the German company Celonis, we mainly gained a strong strategic partner that will not only help us with entering the enterprise sector, but will also support our further growth. It is said that the most difficult stage of a company is growing from 30 to 100 employees, which Celonis went through about four years ago. And we are right in the middle of that stage now.
Was that your goal from the beginning?
Ondřej: Selling the company was one of the options that we considered, but definitely not so soon. We received the first offer to buy the company in 2018, less than two years after the product was launched (that offer was from Celonis, by the way), and others followed. There was interest from the biggest SaaS players, but we didn't consider it. We had big plans and there was still a lot that we wanted to do. We turned down everything, even though it was sometimes really difficult, especially when the offers started to approach nine-figure dollar amounts. We turned Celonis down a total of three times. The fourth time, they come with an offer that couldn't be refused. I described the most important reason above. The other reason was, of course, the incredible financial appreciation of our work. Of no less importance, the fact that we were acquired by Germans, and not Americans, played a role. There are tremendous cultural differences compared to the United State and neighbouring Germany is simply closer to us in terms of temperament.
Patrik: I venture to say that one of the biggest roles in Integromat's success was played by the fact that we did not build it up in order to sell it later. Integromat is a project whose primary purpose was to save us time, and the idea that we could turn it into a cloud integration platform came only later. The end-user experience played a significant role in the absolute majority of decision-making processes and it therefore took us several years to get the feeling that it was time to show Integromat to the whole world. This goes precisely against the well-known MVP (minimal viable product) philosophy, with which, I would say, the prevailing majority of today's startups are established.
How do you announce such news to your colleagues?
Patrik: I vividly recall how the announcement was accompanied by deathly silence. It was obvious from people's reactions that they were absolutely caught off guard, which is no wonder, since for many people, acquisition is a synonym for personal earthquake. The entry of new owners into decision-making processes can mean a fundamental change in a company's vision and culture. But these are precisely the reasons that the "courtship" with Celonis took us so long. The product as such is great thanks to the fact that there are great people behind it, which of course Celonis was aware of, so it took us a while to find the ideal way to bring the companies together. In retrospect, I see our colleagues' reaction as confirmation that we are building a great group of people, because their main concerns stemmed from the fact that they could lose that group.
Ondřej: That deathly silence seemed truly terrifying. I tried to joke that we were not at a funeral, but at a celebration, but it completely missed the mark. People automatically began to worry about their jobs and it took several weeks for everything to settle down. Now no one has any doubts and we're moving full-steam ahead.
With CzechInvest's support, you spent three months in Silicon Valley with the CzechAccelerator program at the beginning of 2018. If you had to sum up your stay there in a few sentences, what would you say?
Ondřej: We were part of the new version of CzechAccelerator, which was renewed after a long period of inactivity. We were accompanied by certain labour pains, but we rate our participation positively overall. Unlike other startups, we didn't go there to find an investment; our aim was rather to explore the market in Silicon Valley, gain contacts to potential customers and learn to work with their market, and we succeeded. Furthermore, the entire team from CzechInvest worked incredibly hard and I believe that they learned from the aforementioned labour pains and used them to make improvements in the subsequent rounds.
Patrik: Ondřej summed it up aptly. I would only add that it was short :).
What, for you, was the most powerful experience during those three months?
Ondřej: For me, it was establishing contacts with experienced people, some of which still persist today. That is great value added and for that alone, the trip and the investment associated with it were worthwhile.
Patrik: If I have to mention just one experience, I would perhaps say getting to know how people in the US think. Whereas in our country people often look for products based on low price, overseas low prices are perceived as a risk and cheap products are rather avoided there. And the reason is simple - if it's too cheap, there is a big risk that the operator will "crash" sooner or later, which in turn brings the customer a worry in the form of finding a new supplier.
You're staying at Integromat, but what are your plans for the future? Will you start a new project?
Ondřej: Never say never, but Integromat will be likely my last project. We have a long road ahead of us, a new and still developing market and big ambitions. I'm fully committed to our vision and I'm not considering making a change at all.
Patrik: If anything has ever fulfilled me in my life, it's creating products that have a global reach and improve people's lives. And with respect to automation, the beautiful thing is that we're just at the beginning. The absolute majority of people and companies around the world do not even know how accessible automation has become thanks to us and similar products.
Source: Czechstartups.org, 2020