When a new technology or business concept proves to match real customer needs perfectly, growth becomes a natural first priority. Fast growth. Profitable growth. Sustainable growth. And when your new business grows by more than 40 percent a year, it is sometimes referred to as “hyper-growth”.
The Swedish video automation pioneer Phyron grew by several hundred percent from 2020 to 2021, and is expected to do it again in 2022. We asked Maria Smith, the company’s Growth banker at the largest Nordic Bank, Nordea:
Hi Maria. I must admit that I never heard that title before. What’s the role of a “growth banker”, how is it different from other corporate banking services?
Haha! If you never heard of it before, it might be because we are the first of our kind – at least in this part of the world. Simply put, our department at the bank is focusing exclusively on the next generation industrial companies. As you may know, the Nordic region is famous for its active startup scene. We started in Finland, and then here in Sweden four years ago. We have similar setups in Norway and Denmark, too.
Before engaging in a potential customer, a regular banker would take a critical look at their revenues and balance sheets from the last five years or so. With a startup the focus is rather on the technology, their revenue model, how they have managed their capital to date, and not least the quality and stability of the management team. It’s much more about immaterial assets, and our role goes way beyond credits. To support and facilitate the continued growth of our clients’ we must dig much deeper into their business realities.
Phyron is a great example of what we are looking for. Innovative technology, a well-defined market, stable owners, and a capable management team, well-financed, rapid and controlled international growth... It is also important that we share similar values and views about the business.
We also asked the company’s CFO Dan Oxing about the challenges of hyper-growth:
“Financially, the overall challenge is to ensure a healthy and reasonably predictable cashflow over time. Investors naturally want growth and a healthy return on their money a.s.a.p. But, to ensure that growth you may need more Sales or Development resources and so forth, which in turn may require more financial resources. And when you grow very fast in a new or rapidly changing market, maybe entering new markets too, it is difficult to predict the exact timing of new revenues. So far, we have been able to stay on track with our targets and to avoid cashflow-related problems.”
Global growth is not just about money, is it?
No, when a company aims at a global market, there are many other challenges to overcome. Languages... time zones... currencies... cultures... The issues that require most hands-on time and consideration are essentially HR-related.
When you have subsidiaries abroad, employees and consultants on several continents, a seemingly simple detail like fair renumeration is bound to involve social benefits, income taxes, vacations, and other complex issues. Which, make no mistake, becomes infinitely more complex when you start to weigh them against each other. As we continue to add new markets and new people on the ground, we are evaluating several alternative approaches including external services.
This is just the operational side of Human Resources, the people side is living proof that we are doing things right. Located across Europe, in North America, the Middle East, and Southeast Asia, our people keep managing the challenges of hyper-growth with flying colors, every day of the week.