DEALCOCKPIT: Can you introduce yourself and your company?
Philippe Lefaure: I am Philippe Lefaure, founder and chairman of LID Technologies, which was created on July 1st 2004. We are the leading equipment supplier to the automotive sector, including motorbikes and trucks. We specialise in wireless electronics, wireless technologies for tyre pressure and tyre pressure connected via our communicating telematic boxes.
DC: The company has now reached a certain maturity, having changed its trajectory or at least its name. Could you give us a brief chronological summary?
Philippe L.: We started out with around thirty people and around three or four million euros in revenue up until 2008. From 2010/2015 we saw an acceleration. The company reached break-even at the end of 2011, and from then on we doubled our sales every three years, which is still the case today. In the first few years, we went from twenty million to forty million and we hope to reach eighty million in the next three years. The aim is to reach one hundred million by 2030.
DC: That is impressive, we hope you do.
Philippe L.: We are working with a promising technology, since Europe has legislated on a technology in which we are world leader, namely tyre pressure monitoring on buses, trailers, and lorries. This opens up enormous opportunities, and is why we are experiencing this growth.
DC: LID Technologies was born of innovation. Is it your innovation?
Philippe L.: Yes, I spent ten years at SIEMENS in Toulouse, in the design office of a division that was also developing wireless technologies. I exported technologies that were starting to emerge in the automotive sector, to the motorbike, lorry, trailer, tractor, large farm tractor and site machinery sectors.
DC: Are you now still continuing to innovate? What role does innovation play in the company as things stand?
Philippe L.: Every year we reinvest more than fifteen per cent in the company's R&D, not only to be innovative but also to offer new products that are ahead of their time, enabling us to remain leaders in the sector. Today, we of course have new products. We were the first on the market to launch Bluetooth TPMS sensors three years ago. We have also launched connected boxes for trailers, for everything to do with predictive maintenance, and we are developing projects over the next three to four years that are going to be revolutionary in the industrial and automotive sectors, although I cannot reveal what they are.
Innovation is a major part of our DNA, as is having patents and being ahead of the competition. We were a small company before we were bought out at the end of November by a big American group worth thirteen billion. But when we were not yet under the umbrella of this group, we absolutely had to be ahead of the game and have cutting-edge technology to be able to secure markets.
DC: You obviously operate internationally. In terms of your current market position, how have you distinguished yourself from the international competition, which must be quite overwhelming?
Philippe L.: We went there right from the start. In 2005, we had already set up our first company in Japan, in 2007 in the United States, and today we are in Korea, China, Turkey, Germany and still in the United States and Japan. We immediately set up companies at the heart of the industry close to our customers, which allowed us to make direct contact with local residents who spoke the same language as our customers and helped us forge links. Today we still have customers that we've had since 2007.
DC: You have undertaken several rounds of fundraising and now you have made a different choice, namely to be bought out by a larger group. Going back to those fund-raising episodes, I imagine they were essential?
Philippe L.: Yes, we completed our first fundraising campaign in June 2005, raising two million euros. We needed to rapidly penetrate new markets, so we had to invest massively in R&D for which we needed to find financial partners in the form of venture capital funds. At the time, it was seed money, because it really was seed money.
We were lucky in that we found some big funds, such as BNP and a big fund, IRDI, in Toulouse, which backed us and we were able to raise two million euros. Three or four years later, when the crisis hit, we raised three million, which enabled us to get through the crisis and come out of it even stronger. We had a capital restructuring in 2020, and that same fund stayed with us for the restructuring, allowing us to remain in step for almost twenty years with our local and Parisian partner funds.
DC: So, a change of strategy or an opportunity for the buyout?
Philippe L.: It wasn't a change of strategy, because it had been prepared from the start, since the function of funds is to exit at a given moment.
We undertook an LBO during which some people left. We then planned a capital restructuring based on an LBO seven years later, in 2027, and a merger opportunity arose with Amphenol, who approached us. We were tempted by the approach, since this is a company which, despite its size of thirteen billion, does not seek to integrate the companies within its group, preferring to leave them independent, which means that today, four months after the takeover, we can observe that no major changes have been made within our organisation. Amphenol's management considers that we have succeeded so far, so we should be left alone. They are letting us do our job and giving us even more resources to do it.
DC: As a founder, how have you experienced the various rounds of financing over the last twenty years?
Philippe L.: The hardest is the first one. When you free up capital after creating a company, the dynamic is different. It's a choice that has to be made very firmly from the outset, because you give financiers part of your shares, but insofar as the funds have no executive role and you have one hundred per cent control of the company. Ultimately, it is just a matter of paperwork and at the end of the day the shares are divided. It is a great experience because you continue to manage the company without someone telling you what to do. We had reporting every three months, so the process was rather simple to manage.
DC: Were there any unexpected developments or setbacks?
Philippe L.: There have been industrial setbacks, such as in 2009, when the law making tyre pressure compulsory was postponed for ten years. There have been ups and downs, and the 2009 US subprime mortgage crisis where we had a 50/50 chance. We needed money because everything came to a standstill and the funds on the sidelines told us they had money, but not for everyone. We had a fortnight to show them that they needed to invest in us, and we ended up developing a lot of innovations during that time, which has enabled us to be much stronger today and to be the leader in many fields. Ultimately, the crisis had a silver lining.
DC: So how do you see LID Technologies in twenty years' time, having already steered the company through its first twenty years?
Philippe L.: In twenty years' time, it will still be an international group, because today 95 per cent of our sales come from international sources, outside France. It will be a large enterprise generating a turnover of perhaps two or three hundred million, with a much broader product portfolio. It will be an established company that maintains its roots in the heart of Toulouse, with entities all over the world, and always with the same drive for innovation in wireless technologies. However, it will be without me, because I think I will have been retired for a very long time.
DC: We certainly hope so. We are also talking today because you have put your trust in DealCockpit and we thank you for that. What made you use the platform?
Philippe L.: It was on the recommendation of my corporate attorney. We were looking for a Data Room, as we already had a takeover procedure in 2015 that had been aborted. We had chosen a Data Room from our investment bank and, as we have a direct approach, we were obliged to do so. It was through word of mouth that I ultimately ended up with two names. I chose the one that was recommended to me. The person who used DealCockpit had told me that there hadn't been any setbacks. That was what we were interested in, since we were the ones who were going to manage it. It was therefore important that it was extremely reliable.
DC: And what did you like about it?
Philippe L.: The simplicity. It was easy to use and the billing was very clear. What's more, we didn't have any problems getting started or any complaints from the company or the investment banks and lawyers, who are all connected.
DC: Is there anything we could improve, in your opinion?
Philippe L.: A small modification could be implemented to ensure that the users have seen the latest changes. Perhaps a message at the top of the page indicating new documents or a history tab would not be a bad idea. This would allow users to see everything that has been added.
DC: Thank you, we appreciate the feedback. One last question for all those SMEs for whom you really are an inspiration. How do you go from an SME with a great idea to a large international enterprise?
Philippe L.: First of all, I think it takes a lot of resilience and a lot of hard work. You have to get up every morning and get back into the battle every day, and constantly question yourself, which is what I've done for the last twenty years. Secondly, it is important to surround yourself with the right people and, when you appeal for funding, to go for it and not regret it.
I have always been told that it is better to own ten per cent of a company that is worth money than one hundred per cent of a company that is worth nothing. And in the end: money makes money. In all cases, you have to develop, and to do that you need money. If you want to accelerate and if you want to make a mark, you need the means to do it. Today, there are few ways of raising money, which makes the process very difficult, but you have to try and you should never regret it: you can always tell yourself that you could have done without it, but if you want to move fast you need funds.
Other than resilience and hard work, you need publicity and, ultimately, faith. If it doesn't work, you have to start again. They say these days that you have to fail to bounce back.
I was lucky that LID Technologies was my first company and I succeeded. And I sold. It was a great experience and first and foremost a human one.
When you set up a company, you should never do it to make money, you should see it as a human experience and really live it.
It is extraordinary to see how much we can learn during this experience. I am an engineer by training. Everything I have learnt as an entrepreneur is a thousand times what I would have learnt had I stayed in a company as an employee.
DC: A great story!
Philippe L.: It will continue differently from here on out. I will be assisting them for a while, but I am in the process of preparing my own future. I do not want the company to crumble behind me, so I will do everything I can to ensure that it can continue with the best people to take it over.