Building For the Future – the Path to a EUR 5B Company

Michael Falck

Relex Solutions is a SaaS company that’s experienced 50% annual growth for 10+ years, with revenue of €132 million in 2021 and roughly the same ARR today. Relex has 1500 people working at the company and recently secured a €500 million investment led by Blackstone in 2022, at a €5 billion valuation. 

In his session, Michael Falck, Co-Founder of Relex Solutions, shared some of the most crucial stages of Relex’s growth journey, and the approach they used to build a sustainable and profitable SaaS company.

Founders with a shared vision

You need founders with a shared vision. It’s helpful to have someone with the desired skill in your chosen field of work, but that’s not something Relex had. They wanted to build a sustainable business, which impacted many of their decisions and is perhaps why after 16 years, all three founders are still working and getting along. 

When starting a SaaS company, ask yourself if you want to build a company to sell in 5 years? Or if you’re going to build a sustainable business that might take 15+ years to build? The answer to this question will determine how you shape your company.

Achieving product-market fit

Most growth comes after achieving product-market fit, and it’s essential not to scale prematurely, which is why RELEX did not take any external funding for ten years. Although many see coming from a small home market as a disadvantage, Relex found it very beneficial. Relex started in Finland, and they ended up with only one or two retailers in each segment. 

This forced them to work with many very different retailers, and when they asked their chief architect to build their product, he simply said he couldn’t be bothered because of the massive variance in the customers. Instead, they made a platform where business people could customize the perfect solution for each client, which turned out to be one of the biggest differentiators and success factors for Relex. 

Focus on company culture

A company’s culture is founded in its early days, and becomes increasingly important when the company grows and expands into new segments. When growing, it becomes challenging to know every person and what they are doing, which is why functional company culture is crucial. To give you some inspiration, here are Relex’s core values:

  • The customer is a friend
  • The colleague is a friend
  • We provide measurable value
  • We stop stupid things
  • Life is supposed to be fun

Expanding to new markets

One of the most critical moments of Relex’s growth journey was entering the US market. In order to have a successful market expansion, Michael Falck has listed the following things to keep in mind:

  • Reserve sufficient resources, as expansions tend to be costly
  • Founder and key personnel need to move over
  • Getting the first references is crucial (old merits in Europe didn’t matter in the US)
  • Priority needs to be communicated to the whole company, not just the people directly working in the new market

Building a multi-product company 

Relex started as a supply chain optimization company, but later expanded into space and floor planning optimization to serve their customers better, which tremendously improved their solution. Some companies’ addressable market may be big enough to continue growing indefinitely, but that wasn’t Relex’s case. Eventually, growth becomes limited because of the market. It’s hard to kick off new things, no matter the company size, which is why Relex is investing tons of resources in new possible growth products to ensure future growth.

Key takeaways

  • Pick the right co-founders
  • Achieve product-market fit before scaling
  • Build a strong company culture
  • Have enough resources for market expansion
  • Plan ahead early for new solution areas