From startup to scale-up - EY 19/03/18

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The fact that the award for “Most Promising Enterprise of the Year”, changes into “Scale-Up of the Year” in 2018 is only one of the many indications that 2018 is going to be the year of scale-ups. Time to ask two experts what scale-ups exactly are, and especially: how can we get more in Belgium?

Stefan Olivier, Markets Leader EY and scale-up expert, is expecting us together with Jürgen Ingels, Co-Founder at B-Hive. Well hidden in a dead end in Diegem, B-Hive supports start-ups in the fintech sector and links them to big players in the financial industry.

Ingels sold his successful fintech start-up Clear2Pay and since then invests through his own fund (Smartfin Capital) in start-ups and growth companies in Europe. Eight years ago, he started According to him, it is now time to shift our attention to scale-ups. “I am 100% convinced that people who are talking about start-ups will only talk about scale-ups in three years.”, he says.

Many start-ups, hardly any scale-ups

Compared to startups, “scale-up” is a relatively unknown term. Generally, scale-ups are described as companies that have managed to raise at least 1M of funding. “Nowadays that is already not enough,” Ingels says. “For me, a growing company is only a scale-up when they have at least 3 million in revenue.”

“In the last couple of years, Belgium has created a lot of start-ups”, Stefan Olivier completes, “but hardly 5% become a scale-up. That growth is still not easy in our country. You not only need ambition to leave the peloton and go for a big growth jump; you also need ‘juice’ in your legs to make that growth happen.”

Motor for welfare

“We don’t have 100 scale-ups in Belgium today. At the moment, you need at least 15 million euros to really make it happen as a scale-up,” Ingels puts a number on it. He continues “but in Belgium, the funds are too small to take such risks. That is why these companies leave to the US or the UK where they have these necessary funds. On top of that, most scale-ups are relatively small companies of 30 or 40 employees, so it’s easy for them to move.”

The fact that scale-ups struggle in Belgium is very unfortunate according to Olivier. “On a political and societal level, a lot of good things get told about start-ups, as they are a perfect illustration of entrepreneurship and a societal added value. But start-ups only form the base for scale-ups. It’s the scale-ups that grow out of the start-up phase, and they create the real added value. They provide a lot more jobs, more knowledge, more customers, you name it. Scale-ups are the real motor for welfare, not start-ups.”

The most crucial thing for scale-ups

According to Ingels, the lack of scale-ups in Belgium is not limited to financing. “It is very hard to sell new technology to Belgian companies. For example, in Sweden they embrace new technology immediately. By the time a Belgian company gets to convince the Belgians of the use of the product or service, a Swedish with the same idea already has a revenue of 15 million euros and a big market share. You immediately start with a delay.”

Time, according to Ingels, is also the most crucial thing for scale-ups. He says, “the real promising companies are not the companies with the biggest budget, the best product or team or biggest market, but those who manage to reduce time. In this fast pacing digital world, you have to be able to bring your product to the market immediately.” 

An ecosystem of second generation entrepreneurs

Ingels asks the question that is burning on our lips: “How can potential scale-ups reduce time?” He says “by introducing them to an ecosystem of second generation entrepreneurs or people who already made it.” He gives an example: As a scale-up, you need to get money fast, but you do not know where to get it. You will have to investigate the best venture capitalist and from there, you will be linked to a junior. Your idea is good, so the junior will send you to his/her boss, who again will send you to the next in line. By the time you see a partner of the fund, months will have passed by. But when you are in a network of second generation entrepreneurs and you can convince one of them immediately, then he/she will introduce you to the partner from the start.”

The right resources

Another condition to grow to be a successful scale-up is the team you work with, according to Stefan Olivier. He says “your team has to provide maximum relevance and added value at all times. You will have to continuously look new talent.”

“That is very un-Belgian of course,” Ingels adds. “Belgians like the expression ‘Don’t change a winning team’. But actually, you should do this. The people you need to start you company are not the same as the people you need to scale up your company. We, Belgians, are not going to replace those people who were there at the beginning. We are going to train them for new challenges, because ‘in principle, they are good’. But as a scale-up you don’t have the time for that learning curve. So, you will need to say goodbye to those people and replace them with better candidates.”

“The same applies to company systems”, Olivier continues. “You need to invest in systems that you will use tomorrow. Those systems may not be your core business, but they are the fundamental for the robust management of your company.”

“This does not mean that you can think about it too long,” Ingels warns. “If 80% of the market uses a specific system, why would you develop or spend time to research another product? Just take what is available on the market and what is being recommended in your network of entrepreneurs, and afterwards you can focus on your core business.”

New organization for scale-ups

To provide scale-ups in Belgium with the highly necessary support, Ingels started six months ago a non-profit organization called “Through, we want to unite growing companies and experienced entrepreneurs in an ecosystem to share knowledge and know-how to make time squeezing possible.”, Ingels explains. “That is why we partner with EY. A lot of scale-ups have hundreds of practical questions EY can answer in the blink of an eye.”

“We launched the EYnovation programme to give an example, with services specifically for start-ups and scale-ups. Think about IP-problems, international employment, growth financing, international taxes, etc. On the other hand, we also offer the EY Growth Navigator, a product that helps us to make a company assessment fast. We can for example see how robust the support systems are in a company. Can they handle the expected growth?”

First festival for scale-ups

This fall, organizes the first festival for scale-ups: SuperNova. “With this conference, we want to put Belgium on the map. There are a lot of festivals worldwide around tech, but nothing specifically yet for scale-ups. During the four days, we want to unite the most talented international speakers of technology companies, but also the best of what Belgium has to offer and showcase them to the international public of investors. To wrap up, we also want the big public to get to know the newest tech innovations, so we can warm up Belgians for this world.”

The first edition of SuperNova will take place on the 27-30 September 2018 in Antwerp. More information available soon on