In every new investment case, AI plays a prominent role today.
"In every new investment case, AI plays a prominent role today."
AI seems to be everywhere today. But which technology companies actually succeed in making AI relevant for Software As A Service and thus creating added value? Fortino Capital now makes that difficult assessment with every new investment.
They did the same with TechWolf, a fledgling but ambitious technology company based in Ghent, which already counts numerous multinational corporations among its clients. Fresh from school, Andreas De Neve, along with two classmates, founded TechWolf in 2018. They lacked business experience, but they did possess engineering degrees with a specialization in AI and natural language processing. The idea? To scrape and process as much data as possible from employees using AI so that companies can have the most accurate possible picture of their employees' skills. The Ghent-based company is growing rapidly and now has around seventy employees. In 2020, TechWolf raised its first million euros in investment capital, followed by a second investment round worth 10 million euros two years ago. Jeroen Van Godtsenhoven, among others from Fortino Capital, also contributed to that operation. He had worked for over twenty years at several large software companies but made the transition from the operational level to the investment world almost three years ago.
Mr. Van Godtsenhoven, for you, TechWolf is a kind of perfect investment for Fortino Capital. On the one hand, because new software applications without AI have no future for you, and on the other hand, because AI is also genuinely central to TechWolf's entire business model. Can you elaborate on that?
Jeroen Van Godtsenhoven: Over the past ten years, we have consistently worked with B2B Software As A Service (SAAS) companies, companies that develop software for other companies, such as companies like Teamleader and Efficy that develop ERP applications or CRM systems. Mainly thanks to cloud technology, these companies have been able to experience rapid growth in recent years.
But we believe that today we are at a new turning point: thanks to AI, it is no longer just about better or faster technology, but intelligence is also being added. As a result, we will be able to automate processes much faster, and the productivity of new software will also receive a huge boost. That is why the AI factor is crucial in all investment decisions we make now - whether it is about the possible transformation of existing software companies or the search for young companies. So today, AI is prominently on the table in every new investment case.
What sets TechWolf apart from other technology companies also working with AI?
Andreas De Neve: People are partly a product of their time. In that sense, we are fortunate that AI carries so much potential precisely today. The market is enormous. Many companies are jumping on it now, but we have been right in the thick of it since the beginning of our education. It has always been the common thread. That gives us an advantage.
From an investor's perspective, that is probably also a double-edged sword: it is the technology of the moment, but almost everyone is doing 'something' with AI. Why did Fortino choose TechWolf?
Van Godtsenhoven: Primarily because they solve a real problem. Just at a time when all large companies are fully committed to the crucial skills transition, they come up with technology that maps out employees' skills. Technology that is also scalable. In addition, we have full confidence in the three founders of TechWolf, Andreas, Jeroen, and Mikaël: they know exactly what they can do, but they also surround themselves perfectly with employees who complement their gaps and shortcomings. I remember a situation where we advised them on how TechWolf, as a challenger, could win a tender. Two days later, it was all worked out. The result? They won the tender.
TechWolf aims to become a new Flemish unicorn, a start-up worth more than 1 billion dollars: is that a realistic ambition? Where are you today, and how can Fortino further support you in the coming years?
De Neve: We already sell our software to around thirty multinational corporations: from KLM or HSBC to Booking.com and Engie, as well as several major banks. They all struggle with the same challenge: attracting new talent with often specific technological expertise. By making existing employees' skills transparent, we ensure that we can create opportunities for those who can retrain and upskill. By 2026, we hope to be able to help employees from about 100 large companies. So our unicorn ambition is directly linked to societal impact. If you can become a world leader in this market, it immediately creates so many economies of scale that the difference with the second or third will only grow. Growing very fast is therefore an absolute requirement for us, and that's why Fortino's financial contribution is so important.
What advice would you give to young and ambitious technology companies from Fortino Capital?
Van Godtsenhoven: We primarily look for companies that solve real problems, have developed a scalable technology for this, and already have a first prototype in place. This implies that they are not only looking for money for their product development but also need funds for their market approach and rapid scaling. If you do this too early - when your product is not yet mature enough - you risk burning a lot of money. So, initially, we look for the real maturity of such a technology company and examine exactly where they are in their growth curve. Based on that, we decide if, how, and where we can support such a company.
Furthermore, it is also a marathon with many sprints where you combine vision and ambition with the right culture and organization. Management and leadership teams make the difference here.
Is AI today a decisive criterion in Fortino's investment decisions?
Van Godtsenhoven: Yes. If we cannot find an answer to whether AI is an opportunity or a risk for a particular company, we will not make a certain investment. Because young companies that have not even developed a clear vision on AI today really start with a handicap.
Was that approach also an important added value in the collaboration with an investor like Fortino for TechWolf?
De Neve: For us, two important criteria played a role. Firstly, in your shareholder structure, you need people who believe in the potential of the technology and the solutions your company offers as much as the founders themselves do. From our first round of capital in 2020, I knew that was definitely the case with Fortino. The enthusiasm was mutual.
Secondly, to successfully land a software product in the real world, you also need to know that real world inside and out. In that respect, I have always had full confidence in the people at Fortino: they all have tremendous experience to fall back on. Either in commercializing software companies or in executive roles in often very large companies.
More than once, they have helped us make a difference: for example, in acquiring large customers or providing practical assistance in complex situations. So, they know the other side. That complementarity is very valuable to us."
