September 3, 2024
Yesterday, Safran announced the acquisition of Preligens for €220M. It is always with mixed feelings that a VC experiences such an event: we’re obviously happy, because exiting companies (especially with great multiples) is after all the name of the game of our business, but at the same time, it also means the end of a long term relationship which always comes with a bit of sadness… In the case of Preligens, this story lasted 7 years, from the seed round we led in 2017, to the company’s acquisition this summer.
Rather than telling the Preligens story from A to Z, I wanted to take this opportunity to highlight a few key aspects of Preligens’ story that could be good learnings for other startups.
Team quality is the number one factor of success for a company - that’s obvious, but Preligens illustrated the point to perfection.
At the beginning, you need visionary people to believe in the crazy idea of revolutionizing the sector of defense through AI. And this is what we felt right away with Arnaud Guérin and Renaud Allioux who co-founded Preligens (Earthcube, back then): they had the perfect track record to try something in this field and had a strong determination to succeed. They very quickly managed to assemble an A-team of engineers around them to develop the first version of the product.
Arnaud and Renaud always struck me with the high standards they set for recruiting new talents - a common trait across tier-1 entrepreneurs, who never settle for less. It is only by attracting people better than you in one area that you will lead the company to the next level. And the more senior the people, the bigger the impact.
In Preligens’ case, three key recruits stand out, who had a clear impact on the success of the company. Without them, I’m not sure Preligens would have gone such a long way - really, one person can make a big difference.
First, François Bourrier-Soifer, one of the most successful French lawyers of his generation, decided to quit everything to jump on the ship back in 2018, fascinated by the impact Preligens’ product could have on the defense industry. His lawyer approach in a sector that’s particularly complex to navigate helped the company secure larger and larger contracts with tier-1 organizations in France and abroad.
Second, Grégoire de Saint-Quentin, a 5-star General, who was the head of the French Special Forces, and who could have easily gotten a high profile job in any large defense company, also decided to join the - still small in 2020 - startup Preligens. His arrival brought an even stronger credibility to Preligens, which immediately benefited from his invaluable experience of the military market.
And third, in 2023 the founders suggested the name of Jean-Yves Courtois, former CEO of Oralia, a successful French defense company, to take over as CEO to lead the next phase of the company, a testimony to the founders’ maturity. As for François and Grégoire, Jean-Yves was convinced that AI would have a tremendous impact on the defense market. He joined in 2023 and did a huge job in reorganizing the company’s operations to prepare it for the next phase of its growth, and put it on the break-even path. Last but not least, he eventually managed the M&A process that we entered into.
Another key element of Preligens’ success lies in its resilience. Every startuper knows that the startup journey is no treat, but boy is that particularly true in the defense industry when you’re a small startup! Long sales cycles, shrinking budgets, highly political sales with an infinite number of stakeholders to align, enemies hidden everywhere trying to undermine you because you’re poaching on their turf… The setup is extremely tough, and Preligens is by far the company that has known the highest rate of rollercoasters in my portfolio. How many times did we think a deal was finally about to be concluded, but for some obscure reason, it had to be postponed again… But no matter what, the team would go back to work until the objectives were reached - where it would have been much easier sometimes to just give up. I’ve rarely seen such determination in a team, an attitude that actually cascaded throughout the whole organization. So the lesson here is: however hard it is sometimes, if you truly believe in your vision, keep on believing & on working, it will eventually pay off.
Finally, in the second half of 2023, a number of players started approaching Preligens, seeing a lot of value in the team and the technologies it had developed over the years. By then Preligens was on the verge of profitability; it had the choice between keeping its independence, and finding a home that would be the right one to continue its adventure. Among the candidates, Safran Electronics & Defense was the best fit: it was already a customer of Preligens, and shared a common vision of AI for the defense industry.
While with our VC-centric mindset, we often talk about “exits”, the reality is much a story of continuity, through which Preligens (now Safran.ai) will grow towards its vision - and we wish them the best for what the future holds… But one thing is sure: it’s gonna be no less than preligendary!
