BNR podcast: Patrick Kerssemakers | FonQ

What do you do when your business is growing faster every month, but your bank balance can't keep up? That's how Patrick Kerssemakers' search for an investor for his company began. FonQ grew rapidly, demand exploded, but in order to realise that growth, more and more stock had to be pre-financed. And that eats up cash. Not because the company is doing badly, but precisely because it is doing well. In this episode of The Deal of Your Life, Patrick explains how he and his partners expanded a collection of niche webshops for “plug-free” products into fonQ, a leading online department store for home accessories. He also explains how that growth ultimately forced them to look for an investor or buyer, not out of luxury, but out of necessity.

The beginning, a hundred webshops and one brand

Patrick started his entrepreneurial adventure in 2003. First as individual webshops, later as a cleverly constructed ecosystem of niche shops, from wardrobe shops to beanbag shops. Everything for the home, everything without a plug. It worked. And with fonQ as the brand name above that structure, it became bigger and more serious. The ambition was high. Patrick saw early on where e-commerce was heading. New big players were coming, the market was consolidating, and if you didn't grow fast enough, you would be overtaken.

Growth is success, but also a cash flow trap

And that's exactly where it starts to get tricky. In retail, growth isn't just about marketing and sales. It's about stock, systems, people, logistics, space. FonQ had to keep stock in order to deliver. And that stock is growing faster than profits. As a result, money is constantly needed, even as the graphs go up. The bank is watching. The pressure is mounting. A partner with capital seems like the logical next step. Patrick explains how they start the process, with advisors, plans, long lists and discussions with private equity and strategic parties. But the initial reactions are lukewarm. Some parties are put off by the stock, or don't yet understand the model.

The strategic buyer who does understand what is on the table

Then Wehkamp enters the picture. Within a short time, an offer is on the table. With a large delegation on the buying side, lawyers, advisors, the whole apparatus. It is clear that this is serious. It seems to be the solution. FonQ is even preparing a big party. And then, while on holiday, the news comes that it is not going ahead after all. No closing. But all the stress, all the preparation, and a company that has to carry on as usual in the meantime.

The redeeming phone call

Talks with other parties follow, but the process continues to move forward. And then comes the phone call that changes everything. Wehkamp wants to return to the table and can quickly train and finalise the deal. At that moment, Patrick knows. This is it.

The deal is finally done. With an earn-out and with Patrick and his partners still on board as minority shareholders. And more importantly, fonQ finally gets the space to scale up and professionalise, without every growth step immediately causing a cash flow crisis.

The second phase: scaling up and ultimately exiting

The deal is followed by a period of enormous growth within the group. Investments are made in the brand, systems and professionalisation. Patrick remains involved for years. In 2017, he exits completely. He is now active as an investor, participating in dozens of start-ups.

Listen to the whole story