Information on the Target

Founded in 2007, Kandbaz has emerged as a leading player in business domiciliation services in France, boasting a fully digitized customer journey. Over the years, the company has grown through a combination of organic and external growth, acquiring around ten companies in the sector. This strategy has allowed Kandbaz to enhance its client base and expand its network of addresses, which now totals approximately one hundred. The company offers a comprehensive range of complementary services that simplify everyday administrative tasks, including mail digitization, telephony, accounting, legal assistance, legal formalities and advertising, and coworking, which are available directly or through partners. Kandbaz currently employs around forty staff members and has assisted over 100,000 businesses with their domiciliation needs.

Industry Overview in France

The business domiciliation industry in France is characterized by a growing demand for digital services, driven by a significant rise in new business formations. In 2022, over one million new businesses were created, reflecting an increasing interest among entrepreneurs in streamlined, digital solutions that enable them to focus on their core activities. This trend is significant in a market that has historically been under-digitized, presenting ample opportunities for companies such as Kandbaz to capture a larger market share.

As the French economy continues to evolve, there is a substantial move towards digitization and sustainability in various sectors, including business services. Entrepreneurs are seeking partners who can offer not only logistical support but also a suite of services that enhance operational efficiency. Companies that can blend traditional services with modern digital innovations are positioned well to thrive in this changing landscape.

Kandbaz’s commitment to integrating environmental and social performance metrics into its growth strategy resonates well in a market increasingly focused on sustainability. The incorporation of a mechanism to reduce margins contingent on achieving specified impact goals demonstrates a proactive approach to blending profitability with corporate responsibility in the domiciliation sector.

The Rationale Behind the Deal

This financing round, proposed by ISAI Growth Lending in the form of OBSA (Convertible Bond with Share Subscription Warrants), enables Kandbaz's management to buy back shares owned by Audacia, a minority shareholder since 2016 that supported Kandbaz during its initial growth phase. The management team's primary objective is to further its profitable growth trajectory by expanding its partner network and deploying its services into new geographic regions in France, such as Lyon and Marseille, as well as internationally, particularly in Belgium. Additionally, there is a concerted effort to increase the average revenue per client through the development of complementary services.

Information about the Investor

ISAI Growth Lending specializes in providing tailored financing solutions for digital companies aiming to continue their development while minimizing capital dilution. Focused on growth-stage businesses, ISAI seeks companies with a proven business model and a revenue of at least €4 million, either profitable or on a path toward profitability with strong unit economics. ISAI, co-founded in 2009 by successful tech entrepreneurs, operates with the support of over 300 entrepreneurs and institutional investors. It manages €630 million across multiple investment strategies, including Early-Stage Venture, Corporate Venture, Growth Lending, and Tech Buyout, and is committed to promoting inclusive and carbon-neutral technology.

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In my expert opinion, this deal represents a strategic opportunity for both Kandbaz and ISAI Growth Lending. Kandbaz is positioned in a rapidly expanding market for digital business services, and its proactive approach to growth, combined with a focus on sustainability, aligns seamlessly with current economic trends. The company's history of profitability and customer satisfaction further reinforces its potential for continued success.

The financial structure proposed by ISAI is designed to support Kandbaz's ambitious plans while mitigating the risk of dilution for existing shareholders. This structure, along with the partnership's shared vision for growth and innovation, sets a positive foundation for future developments.

Moreover, the emphasis on environmental and social impact within the financing arrangement suggests that both Kandbaz and ISAI are committed to responsible business practices. This approach is not only increasingly relevant to modern investors and consumers but also positions the companies well in an industry that faces growing scrutiny regarding sustainability.

Overall, I believe this investment could be beneficial for both parties, paving the way for Kandbaz to solidify its market position while also advancing ISAI’s mission of supporting growth-oriented tech companies.

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