In reality, as early as 2021, a deep rift begins to open up inside Daan. Damian Py, ambitious and internationally minded, wants to speed up the company’s growth by raising significant funds to conquer foreign markets. His partners, led by Antoine Fichet, remain firmly attached to the founding values: French production, environmental ethics and local roots.
This strategic split isn’t simply a question of financing: it reflects two fundamentally different visions of business. As several sources close to the matter confirm, Py now sees Bob as a high-growth start-up that must quickly make its mark internationally, even if that means bending some founding principles. Fichet and part of the board, on the contrary, see the company as a long-term industrial project, where the integrity of Made in France is the very DNA of the brand.
Inside the company, the Py method (he was then the main shareholder) starts being questioned by some employees and certain partners. All the more so as the question of the company’s future arises, with strategic decisions to be made:
As early as 2020-2021, several takeover offers from Asia had already been made, including a particularly significant €10M cash offer from a Chinese industrial player. These offers were systematically rejected by the historic business angels, who felt the multiple wasn’t high enough given the company’s potential.
What is really going on at this point? Hard to be definitive, so much do the accounts differ. Because in reality, and it’s often the case, we’re dealing with wars of ego and money more than business problems. Several of the funding rounds under consideration include cash-outs for one or more partners, which annoys others who would like everything to stay in the company at this stage.
Faced with this resistance, Damian Py draws up an ambitious plan: a stock market listing aiming to raise €13M at a €30M valuation8. For the boss, the operation has a major strategic advantage: turning Daan from an SAS9 into an SA10, substantially changing its governance.
Among other things, this change of legal form would remove the veto rights some investors held under the SAS structure, considerably strengthening the power of Py, who then held around 42% of the capital. The historic business angels, who held 17% of the capital, firmly opposed the plan, which they saw as a manoeuvre to push them out of strategic decisions.
Someone who worked on the deal tells me that this was… entirely true and almost openly acknowledged. Since it also involved buying back part of Fichet’s shares to make sure of control.
The financing plan provided for €10M in new equity and €3M in convertible bonds11, with a free float12 target above 33%. This structure meant dilution of around 50% for existing shareholders, although the advising investment bank had proposed a structure to limit the founders’ loss of influence.
The simulation of post-IPO dilution and control revealed significant shifts in the balance of power:
Currently:
Before the IPO, Py buys shares from Fichet:
IPO scenario without the convertible bond:
IPO scenario with the convertible bond (€3M with a 20% premium):
On top of the million euros the operation would have cost, the valuation at 1.8x revenue13 was immediately judged too low by those who had already rejected the €10M offer and who saw Bob’s potential. But the elephant in the room was obviously the risk of the already simmering governance conflicts blowing up.
While the operation was never seriously on the cards, for some it was decisive in shaping their opinion of Py.
In the summer of 2021, Yotta and Oraxys submit an LOI14. The amount isn’t spelled out, but the idea is to raise €6M. The offer sets out a strategic restructuring for Daan, involving governance aligned with the investors’ goals, but with no explicit mention of a cash-out. Yet a source close to one of the parties suggests that a partial exit for some partners came up in the discussions that followed this letter of intent, and became a point of tension.
While it hasn’t been possible to establish clearly why the LOI went no further, a current Daan executive15 is fairly categorical:
“[Damian Py] is also behind tensions with the banks, some suppliers, clients/prospects. I recently spoke with people in mass retail who told me, without going into detail, that we were ‘burnt’ with them.”
But perhaps the most striking event is Daan’s appearance on Qui veut être mon associé ?, the French TV channel M6’s version of Dragons’ Den. The company is looking for €500K, and 3 jurors16 say yes and put up… €1.5M for 15%. A record. But that’s a €10M valuation, in other words… exactly what the historic shareholders had turned down.
In reality the show goes rather badly, and at the end of the deal, Py makes an otherworldly request. The duo accept on condition that Eric Larchevêque helps them… launch their own cryptocurrency. To which he replies: “Is this a joke?” And Simoncini follows up:
“You’re completely crazy. Seriously, have you taken drugs? […] For me, in their place, that’s a deal breaker.”
Eric Larchevêque came back to the show a little later17.
“Damian Py and Antoine Fichet took a stance, behaved inappropriately. We didn’t even know if they were joking or not. They came very close to not getting a deal. Maybe they were overtaken by events themselves.”
Bourbon, another juror, piles on live, but in the end the deal is struck at €1.5M for 21% + 2% in BSPCE (French employee share warrants) for Larchevêque, a valuation of… €6.5M. Except that on the day of broadcast, Larchevêque writes on Twitter18:
“Unfortunately (for us) it didn’t happen, because Damian preferred to go ahead with another fund that paid more.”
Except that, in reality, while the TV deal didn’t happen, neither did the one with the mysterious fund. Here again, the reasons are very murky.
As often, it’s hard to sort out everyone’s version. The fact remains that it would take another 6 months for an LOI to land on the table, on 10 June.
Behind it is Épopée Gestion, the fund of Ronan Le Moal, the former emblematic boss of the Breton bank Crédit Mutuel Arkea, and of Charles Cabillic, founder of the local services platform AlloVoisins. Two champions of the local economy.
In fact it’s the Épopée Transitions I FCPI, a French tax-advantaged innovation fund, that offers to put in €3 to 8M, with the possibility of reinvesting through:
The Épopée Gestion offer revolves around precise strategic goals:
All with structured operational support through its in-house accelerator, which offers help on digital strategy, ESG, international expansion and external growth. The fund explicitly presents itself as a “local investor-entrepreneur, challenging but benevolent”, with a strong emphasis on local roots and a responsible ESG approach.
Except that if the offer lands on that date, it’s because in a few days an EGM19 will take place that could well seal the crisis between the partners, which has been growing for months.
On 24 June 2022, the agenda provides for a choice between three clearly defined options:
Damian Py himself chairs the meeting that will decide his future, with 100% of the capital represented.
The outcome of the votes is hardly in doubt. Hélène Roux and Johann Terrier, among the historic investors on the board, have long wanted to replace Py with a more senior leader. Unsurprisingly, other BAs, such as Jean-Christophe Dubiez, who took over the shares of a shareholder who died in 2020 and refused to sell to Py, won’t side with him either.
So Py is kicked out of his own company, which he had embodied for years.
The end.
In exchange for these conditions, Py undertakes “in good faith not to disparage the company or its managers, shareholders, partners” - a commitment that has been, shall we say, loosely honoured, according to people still at the company.
His shares, for their part, will end up with Fichet’s close family.