The Story Behind Our Investment In Lunchr
Everything starts in the south of France, like many beautiful stories. Loïc Soubeyrand, founder of Lunchr and co-founder of Teads is from Montpellier, a charming town in the South of France. Hungry for lunch, Loïc ordered a salad at his favorite salad bar and the wait for it seems endless… At this frustrating (and hungry) moment, Lunchr is (almost) born: The certainty that there is a need for lunch digitalization is no longer a doubt.
But beyond the beautiful entrepreneurial history and the exponential growth of the startup, Lunchr is also the story of an encounter between Marie Ekeland and Loïc Soubeyrand. A “love story” that I was lucky enough to dive in.
Loïc Soubeyrand & daphni, a long (long) story
Everything starts in 2011, Loïc graduates from IAE Montpellier, without any entrepreneurial experience, but with an idea. Alongside Olivier Reynaud and Loïc Jaurès (the eventual co-founders of Teads), he presents this idea of a “platform specializing in video advertising” to Elaia Partners. A topic not very sexy at first glance, but one that Marie Ekeland, then Partner at Elaia, knew very well through Criteo, a company she accompanied from the beginning in the very same investment fund. And it’s a match.
Quickly, Teads proves its model and internationalizes at the speed of a successful startup. In 2017, the company is acquired by Altice for €285m, a real pride, not just for Loïc and his partners, but also for the French ecosystem, and a success story that is still talked about today. In 2014, the startup makes a successful merger with Ebuzzing, the startup led by Pierre Chappaz (bio). Together, they hired more than 300 employees and reached a revenue of 200+M€.
You know that you can never really change an entrepreneur. Loïc had his lunch disruption idea and it never really left his mind. He couldn’t help but move on to this new adventure (as he explained in this medium post). But at the time, he allowed himself to work parallel with Teads. “I had chosen a sufficiently large market that remained to be disrupted by technology. It took us a year and a half to crack the model, finally we are on the same execution with Lunchr, even if the analysis was much faster”
He soon pitches the business angel Marc Geffroy, also the first BA of Teads, who gives Lunchr their first money. Marc also introduces another key business angel. Marie Ekeland, his historical investor, who had just left Elaia Partners to create daphni (with co-founders Pierre-Eric Leibovici, Pierre-Yves Meerschman, Willy Braun and Mathieu Daix) and is ready to help. Fortunately for Lunchr, Marie always loved working with Loïc. She has a lasting and fond memory of his first pitches “I immediately wanted to help Loïc, without necessarily directly challenging his market. I trusted his intuition. With Teads, he had already spotted a huge potential in the advertising market. I knew that his vision responded to a deep intuition. He has a strategic vision of the markets, a real gift for recruiting, and he never lets go of anything”.
At an informal coffee meeting (we know that the world of startups it is not only about investment committees), Loïc meets Sarah Caboche. Sarah was a newly hired analyst at daphni, studied at HEC and had her first VC experience at Partech Ventures. Daphni was still in startup mode, occupying a 60m2 open-space office full of boiling minds. The first investments had not even begun. Lunchr seduces Sarah immediately (with their business model of course); and soon after the entire investment team meets Lunchr a term sheet is signed for a seed round. Lunchr has 2.5 million euros to launch their product, and recruit the best talents.
“Actually, Loïc was not familiar with this industry, but he was not afraid to hit the ground running to meet with restaurant owners and sign contracts. He also did an amazing job researching and understanding the complicated legislation of meal vouchers.” adds Sarah. Loïc was more and more becoming an ambassador for the “French way of lunching”, with Lunchr, obviously.
At daphni, we truly believe about serial entrepreneurs to build strong brands and execute a strategy that can blow a market. When the risk of failing is limited, there is no obvious reason why we shouldn’t help an entrepreneur to grow.
The smoke screen strategy
From the beginning of the history of the startup, the team is split in two groups: One is in charge of proving and improving the traction, especially through the group order and associated discounts, the other, in a secret mission, work on meal vouchers.
The “smoke screen” is total when announcing in January 2017 the release of the application. Lunchr positioned itself to only tackle the online group order market… raising some skepticism on the value proposition of the application. But, in fact, a team was already working hard to disrupt the meal vouchers market without getting any attention from competitors. The competing companies are mainly focused on payment method while Lunchr brings together employees around a key moment of the day and promotes social cohesion, creating a new lunch experience.
A team of A players is really needed to solve a challenge this big. “In this type of financing, as the rounds are small tickets, you have to raise before having fully demonstrated the potential of your marketing and business positioning, so the recruitment is one of the keys.” adds Loïc.
Loïc is a solo founder. But from the very beginning he knew how to surround himself quickly by the right people, a quality that Marie has been very impressed with, even from his previous experience at Teads, where Loïc proved that he knew how to hire awesome people and successfully onboard them along the journey.
Sarah endorses Loïc who seems to underestimate his power to gather around him: “In fact, your board works particularly well: everyone has their place, we are the right number of people; you also involve C-Levels that count such as Romain Libeau (VP Marketing) and David Deslandes (VP Corporate). Everything is very natural, even in the decision of the board agenda which is often a big challenge! The way you include everyone says a lot about your people management.”
The startup and Loïc had many advantages to attract talent: A first entrepreneurial success, a kickass investment fund (oops, am I biased?), a willingness to align wages to the market, a great team and company culture. One of the secret ingredients to recruiting for Lunchr has been to challenge people from reputable brands in this ecosystem such as Deliveroo, Facebook, Groupon, TakeEatEasy or Foodora. And of course he find talents who know what hypergrowth means and who demonstrate commitment and ambition for the company.
Traction first: from payment only to a whole new lunch experience
Here’s the thing: There is a community around corporate lunch, and Lunchr is enhancing it. But is Lunchr a B2B app or a B2C app? Is Lunchr a foodtech or a fintech?
According to Marie Ekeland the answer is clear: both. “We are entering a new era of applications, which break the standard categorizations of how we use apps. We do not know if it’s B2C or B2B, first, but mostly because startups are no longer a single service or product. I identified the same thing about Shine and Keakr — other companies in daphni’s portfolio. Consumers are active in the face of these services, they are even contributors, like a community. Their users are engaged because they understand the breadth of the whole value proposition”
In fact, there is a trend of online migration to offline usage. A problem that the event industry has already responded to in part, particularly through the democratization of applications such as EventBrite or networking applications. It is not only a matter of gamifying to engage the community, but to carry the traction, to change it, to enhance the products. Barriers to entry are multiplying, as startups must complete the entire value chain to raise to the top.
Lunchr still has a lot to prove over the next few years: first, the goal in 2018 to reach 1000+ companies, which should not be a problem. Then, rolling out internationally and adapting to the local behaviours and reaching a gross volume of 1 billion euros in three years maximum. Lunchr currently has a strong traction within the startup community, and they are already starting to enter into the market of big corporations. Loïc can count on Marie as his lunch sous-chef and partner in crime. And of course as the occasional lunch partner.