The story about Passbolt started in India, but it is in Luxembourg that the adventure of the start-up really took off. French expatriate entrepreneur Kevin Muller – creator of a web agency that employs about 60 people in Delhi – realised that the password management in his company was a real headache. He therefore created a solution that first became a product in its own right and then evolved into the company Passbolt.

“With my two partners we wanted to return to Europe to create our start-up,” recalls the entrepreneur. “We thought at first more specifically about Switzerland, but stumbling, a bit by chance, on the Fit 4 Start programme, we finally decided to choose Luxembourg.”

The start-up obtained a place in the third edition of Luxinnovation’s start-up programme and Mr Muller was the first one to move to Luxembourg in order to follow the coaching sessions. Meanwhile, the company Passbolt was created and set up its headquarters at Technoport. Cédric Alfonsi, the second co-founder, also came to Luxembourg to get involved full-time in the start-up.

Access to a network

“We already had a great entrepreneurial experience behind us and were not necessarily ready to receive lessons on how to manage our company, but we realised that the people who listened to our pitch did not understand what we were doing,” Mr Muller admits. “We had fallen in love with our idea and did not have enough distance to ask the right questions. Fit 4 Start helped us refine our marketing strategy.”

Passbolt has developed a solution for sharing passwords between employees. The aim is not only to fill the security gaps created by these practices, but also to improve competitiveness, especially in the ICT sector. The solution was first offered as open source to a community of several thousand members who provided the young entrepreneurs with very important feedback to improve their product.

Fit 4 Start helped us refine our marketing strategy.

While waiting for its first revenues, Passbolt was looking for funds. The €50,000 obtained from Fit 4 Start was a first breath of fresh air. This was quickly followed by a private fundraising round of €110,000, which, together with the successful graduation from Fit 4 Start, made the company eligible for a second subsidiary of €100,000 from the Ministry of the Economy.

“Fit 4 Start not only helped us to define our business model, but also gave us access to a network,” says Mr Muller. “Our first investors came to see us just a few days after the end of the programme. All were business angels and one of them was even part of the Fit 4 Start jury.”

Accelerating growth

With €260,000 on the account, Passbolt could focus on the technical development of its solution and on its commercial strategy. In May 2018, the start-up launched its first paying offers. Already during the first few days, the entrepreneurs were surprised to receive much larger orders than expected.

Things accelerated for the start-up which quickly felt the need to start a second round of fundraising. Mr Muller, Mr Alfonsi and Rémi Bertot, the third co-founder who had since arrived in Luxembourg, set to work. They first looked for business angels, before realising that venture capital funds were also interested.

The Digital Tech Fund, a public-private seed fund managed by Expon Capital, joined the Passbolt adventure and made it possible for the start-up to close a round of fundraising at the end of December 2018 for €460,000, twice as much as the target initially set.

As a result, the future is even brighter for the small company that is looking to recruit between three and five people by the end of this year, in particular to strengthen its sales team. The next steps? Mr Muller and his associates are more convinced than ever that they will take place in Luxembourg. In 2019, they hope to obtain a subsidy for process and organisational innovation to support their growth, which promises to be exponential.

This article was originally published in Luxinnovation’s Annual Report 2018.

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