Behind the Scenes of the POSRocket Acquisition Pt.3 (Final)

If you made it this far it means you liked the story and you found it interesting, I will share with you in part 3 all the learning from the post acquisition merge with Foodics.

In our business, Q4 is the hottest month of the year in terms of sales, so to try and close the acquisition in Q4 was a big challenge, we wanted our teams to be focused because you always never know if the deal will go through or not, and you do not want to waste time to grow. Our market is small, I started getting calls from friends in the ecosystem congratulating me on the acquisition before even signing the termsheet, I really did not want the team to hear the news from anyone else, so decided to do an All-hands meeting with the team to let them know about the news, it was a very tricky situation, because usually everyone will be worried about the “unknown” and I personally did not have all the answers because we were still in the process, but I told them anyway. I started the meeting by explaining how 90% of startups fail and only 10% make it, so we were privileged to be of the 10% and that’s all due to their hard work and dedication (which was very true), I wanted to keep everyone motivated.

We tried to anticipate what questions they will ask and we had a slide full of Q&A ready, I also received mixed vibes from the team, some were very excited about the next phase and how we can grow with Foodics at a faster pace, some were very attached to the company and really did not like the idea, but we tried to keep everyone motivated and promised them to keep giving updates whenever we have something.

After we signed the term sheet, I have asked Ahmad and the leadership team of Foodics to visit our offices and they physically visited our HQ office in Amman, we had an all-hands meeting where Ahmad and the team had the chance to speak to the Rocket team, answer all their questions and tell them more about Foodics and it’s plans to expand, and motivate everyone. For me this was essential because it’s also important to get the buy-in of everyone to stay motivated and also see their future with this new merge.

Our both teams (Rocket & Foodics) knew that this will be a very hard task to do since majority of mergers fail due to post merge issues, it is very difficult in nature, you are trying to make 2 different organs work together in the same body, each company has it’s own culture, way of execution etc, and we both almost did not have experience in such very diligent process, but that’s the beauty of startups, you figure things out.

Foodics at that time were in the middle of raising their Series C, so their management team were all occupied in talking to investors, I honestly give them alot of credit and hats off 🎩 that they pulled out to raise the biggest round in MENA for a SaaS company and also finalize an acquisition of their closest competitor, AND make sure they hit their growth targets for 2021 ALL at the same time (Wow 👏🏽)

We actually made sure to focus on 3 areas (People, Partners & Product) and of course the most challenging part was the people, at that time Rocket had around 120 employees and Foodics has around 230 employees, Foodics wanted to grow it’s workforce and had plans to hire, so can it get any better? filling those positions with people who actually understand the industry very well and can have a clear ROI in a short period of time.

Rocket had offices in Jordan, Egypt & Kuwait while Foodics had offices in Saudi, UAE & Egypt, so the common country that we were competing in was Egypt. We started by having Foodics identify which key positions they were hiring for, and try to match this with talent from Rocket. Foodics had a process in hiring, and they wanted to follow the same process by interviewing everyone at Rocket and make sure they all have culture & technical fit, we followed their process and their team literally interviewed everyone in a course of 1 week which was great.

Migrating the teams in Jordan & Kuwait were the easiest because Foodics had no presence in those countries, most of the senior managers were offered positions in the HQ in Riyadh, the most difficult was Egypt, both of us had offices and teams on the ground and there was fierce competition between the teams, and Rocket was giving Foodics some hard time, so merging those two teams was not an easy task.

The summary: Foodics managed to offer 98% of Rocket employees positions in Foodics and everyone got at least 20% increase on their salaries and got a bonus from Foodics as a goodwill gesture to appreciate their hard work (which was a very nice them) but not everyone got the position & title they were hoping for, this created alot of friction for some people, as they felt they were downgraded, this was expected because there is no way you can offer a title & position they want since Foodics already had employees of their own filling or waiting to be filling those positions. Everyone accepted the offers but majority of people that were not happy actually started looking for other options in the market and left eventually, and looking back now, after few months after completing the acquisition we lost almost 17% of Rocket employees as they found other opportunities and this is somehow normal in any merge.

We decided we will use Foodics product moving forward as it was more mature in certain areas, and try to make use of different modules in our system which we developed recently (this was easy🙂) we then looked on how to migrate our customers to Foodics, we had around +3000 merchants at that time, and we also had a plan on how to migrate those customers, this was very challenging because we both had 2 different processes in place and always the devil is in the details.

The migration of customer was not smooth at the beginning for the following reasons (in my opinion):-

• No owner from Foodics’ side and all teams were motivated in closing their existing targets (new acquisitions)
• No clear incentives for teams to finalize the migration
• Very different process, so trying to find out the best unified process took some time
• Writing migration scripts took some time and also we had different hardware components which needed to be integrated.

Please imagine all of the above + closing series C taking place at the same time, after couple of months we managed to have a unified process & incentives in place and migration scripts were ready, and we did migrate the majority of Rocket clients to Foodics and we put a target to finalize everything before the years ends to make sure all clients are on a single product and enjoying all the great product updates we are releasing.

Looking back, it was a rollercoaster for ALL of us trying to digest everything at the same time, thankfully it was a successful migration, the Rocket acquisition in my personal opinion had a great influence on the ecosystem, having a venture backed startup from the region acquiring another venture backed startup also from the region was a great first step, and it really helped us in raising $170m instead of the $100m initially planned. This was all done by the great effort and hardwork on both the Rocket & Foodics teams to make it successful.

The journey is not over yet, still have a lot to learn and very excited for what the future holds for me.

Yours,

Zeid Husban