Why Pleo has succeeded where others have not 

Right Mission, Right Time

Many industries have been and are being disrupted, including the world of expense management. When Pleo founders Jeppe Rindom and Nicco Perra entered this domain, they saw an opportunity to revolutionise a traditionally poor product experience – but more importantly, they took the whole category and turned it on its head.

Prior to Pleo, expense management software had traditionally been sold to CFOs and finance offices, but the product itself was predominantly used by employees. Pleo therefore tailored their service to delight employees, believing that the better the service was for them, it would ultimately improve for finance teams as well. The magic of a product that spenders love and want to use is adherence, compliance and freedom back to finance teams. It meant transforming the role that finance played in the organisation and creating unity across company. The added benefit of this, is that it allows for building service advocates in all companies, a legion of ambassadors who sell the service internally to their senior teams.

As Pleo have grown, they have had to adapt to certain financial requirements around control, but their ultimate mission is the same: to delight the end-user, offer them freedom, trust and control.

Sales & Marketing to Product Led growth

We would be rem iss to not mention Pleo’s excellence in go-to-market strategies. The company shifted from a sales-heavy approach to a more product-led motion, a transition spurred by the realisation that customers prefer self-service options and the industry's trend towards valuing efficiency over rapid growth.

This model integrates product-led growth throughout the customer journey, emphasising customer choice, hyper-personalisation, and a seamless experience across all stages.

Pleo restructured its go-to-market organization from a traditional assembly line to a domain model, decentralizing decision-making and aligning product teams with specific customer challenges. This approach embedded product-led growth across the go-to-market motion, enhancing efficiency and customer engagement.

The end result is a hyper scalable and efficient go-to-market strategy, distinguished by best-in-class payback, stronger unit economics, and higher retention rates thanks to a better customer experience and product stickiness.

Adaptability

Different stages of a company require different approaches and different talents. You need to adapt, think carefully, and move fast.

Pleo were one of our first portfolio companies to recognise the macro environment had changed, the drying up of funding, and that growth at all costs was no longer as highly valued. As such, they made the difficult decision in 2022 to change direction towards higher efficiency, and by seeking it in all aspects of the business they managed to keep a strong growth profile without adding any headcount.

Jeppe’s approach to board support has also evolved in recent years, such as acknowledging the need for a different set of competencies to be able to develop and grow into a large company in a financially regulated environment – competencies, that were not available from the investor representatives. As such Vanessa Bailey joined the board in August 2021 as Chair of Risk Committee with experience from similar roles at Natwest, Wells fargo and Barclays. Likewise, Adrienne Gormley joined with her experience as head of EMEA for Dropbox and COO of N26. It’s no coincidence that these joiners were women, with Jeppe understanding and championing for the board’s need to reflect the values held by Pleo, as well as its customer base.

Sticking to Your Guns

Expense management is a large, broad and fragmented industry. As companies grow and are well capitalised it’s easy to get overly zealous, to cut corners or try to buy yourself to success. After Pleo’s Series D funding, they had $350m on the balance sheet with an owner base with growth expectations. The opportunity to expand the product portfolio or to buy scale and geographies was real. But Pleo did their homework, diligencing the market in considerable detail for months. This analysis allowed them to understand that the most value in an overvalued market would not come from acquisitions, but could be created by going deep into expense management and being the best at their core competencies. The tradeoff being, rather than growing exponentially on a delicate foundation, Pleo would build a robust base in an efficient manner to ensure a strong platform for future opportunities. In hindsight, Pleo made the right call.

With this more focused and capital efficient approach, Pleo was still able to grow approximately 70% in 2023, maintaining a best-in-class net revenue retetion. Indeed, relative to it’s European counterparts, Pleo has generated a far greater return on invested capital (see table below) while achieving clear dominance in the category.