A name unknown to the public, an obscure sector of activity, only one mention in the Swiss media in the last four years. Until now, the Neuchâtel company CloudBees was known in Switzerland only to a fraction of insiders. From now on, the company enters a new dimension. On Thursday, the multinational passed $1 billion in value through a new $150 million fundraising campaign. With that, it enters the very narrow circle of Swiss “unicorns”, the name given to private companies worth more than a billion.
This Friday morning, just after a cross-country trip, Sacha Labourey answers our questions via video conference. “Honestly, I don’t care if CloudBees turns into a unicorn. I am a grassroots engineer, I like to help the small entrepreneurs around me and I will not contact the other Swiss unicorn leaders to create a circle”, confirms the co-founder and strategic director of the company . “But on the other hand, this new unicorn status is very important to our customers. It’s a great recognition of our seriousness and our potential.”
By the way, what does CloudBees do? “We help companies automate the development and implementation of their software,” continues Sacha Labourey. Even today, many companies develop programs in a very slow process: coding, testing, validating, scaling up and then deploying. This can take up to eighteen months in total. Our systems enable continuous development, without friction, so that software is continuously improved.” The Cloudbees co-founder takes Amazon’s example, whose website parts are updated every ten seconds: “Everything has to be done continuously, without manual intervention, for quick results.”
CloudBees’ clients include HSBC, Morningstar, Salesforce and the US Air Force. “The software is everywhere and the need to improve the updates is enormous. The HSBC bank alone has 25,000 developers,” continues Sacha Labourey. His company, which mainly focuses on multinationals and large organizations, has several Swiss banks as clients.
The $150 million raised this week is in addition to the $96.5 million received earlier. CloudBees, close to profitability, should reach 125 million in revenue this year, an annual growth rate of 30%. The company, founded in 2010, now has about 500 employees, the majority outside Switzerland. “The goal is to recruit 100 new employees in the next 100 days,” says Sacha Labourey.
What does Neuchâtel represent for society? “I’ve always lived there and it’s here that we have our largest office in the world, with about thirty employees,” says Sacha Labourey. But the location doesn’t really make sense. CloudBees is registered in Delaware, press releases are signed from San Jose, California, and we have employees on multiple continents. So I can’t tell you we’re a Swiss or an American company… It doesn’t matter.”
The multinational, which currently has no plan to go public, has no Swiss player in the capital. Why? “Simply because none of them wanted to take any risks in the beginning. This is a frustration, not for our company, which has attracted international investors, but for all other Swiss start-ups. We have everything to do well in Switzerland, a remarkable ecosystem, but investors who are still too cautious. The situation has improved slightly, but we are only at 10% of our capacity to fund start-ups in Switzerland.
How many unicorns does Switzerland have? “Since 2013, we have counted 27. And 13 of them have acquired this status between 2019 and 2021. In addition, we have identified 33 companies that could become unicorns within two to five years,” confirms Thomas Dübendorfer, chairman of Swiss IT business angels Sictic. Among these unicorns are Nexthink, Mindmaze, and Wefox.
According to Thomas Dübendorfer, “only 14% of the $2.8 billion invested in Swiss start-ups between January and November 2021 came from Swiss investors, the rest came from abroad. Most Swiss have only invested in seed rounds with a total size of less than $15 million.” According to Thomas Dübendorfer, “in the starting rounds (up to 2 million) it is easier to find Swiss investors. It is very difficult for subsequent growth rounds because there are no large growth funds here.”
Stefan Kyora, co-author of the Swiss Venture Capital Report, “there is a much larger number of Swiss investors and there are currently more funding rounds. The share of start-ups that are able to attract financial players is also increasing. On the other hand, unicorn financing is a global matter and I believe that the location of the headquarters does not play a big role in the decision of actors to invest in a unicorn.
The Wefox example
Is it a problem that Swiss unicorns have more and more employees abroad? “As long as unemployment is so low, I don’t see any other way to grow quickly,” replies Stefan Kyora. The only risk I see here is that companies founded in Switzerland will move their headquarters to other countries where it is easier to find experienced talent – this is why Wefox has moved its management to Berlin, for example, where the largest part of the team is today.”