Designed to respond to the consumer's every wish, the on-demand economy is transforming companies and the labour market, and its rise is undermining the strength of the traditional players.
The term "on-demand economy" was made popular by the rapid success of the new Silicon Valley start-ups led by Uber and Airbnb, and now everyone is talking about it. It refers to business activities where companies use new technologies to bring goods and services to consumers virtually immediately, and is experiencing staggering rates of growth. And so, scarcely seven years after it began, Uber is worth over 60 billion dollars. In the United States, 42% of people have used an on-demand service at some point. This is a trend set to continue.
Aside from the most well-known services that allow customers to order a driver, a meal, a doctor or lawyer, the on-demand economy now seems able to satisfy the consumer's every whim, even the most outlandish. Booster offers a mobile petrol pump service allowing drivers to fill up at any time. Through Techy you can request the services of an IT expert to fix your computer. FriendsTonight finds its users companions for any trip, such as to the cinema, a bar or nightclub. Pamper lets you order a manicure and Soothe brings you a massage. With Trumaker, you can find a tailor to cut you a suit. Washio will do your washing. And finally, Wag! walks your dog for you. There are even start-ups in California that deliver cannabis on demand, plus for Roman Catholics with an urgent need to confess, Scooterino Amen can bring a priest on a scooter to your door. It seems that the economy is more directed towards the immediate gratification of the consumer than ever before.
A new phase of capitalism
The arrival of the on-demand economy marks not only an anthropological development, but also the beginning of a new phase of capitalism. At the start of the 20th century, the introduction of assembly and production lines meant that Henry Ford could mass produce the Ford T at a reasonable price, a development that began to make the automobile more accessible to all. Today, the on-demand economy is allowing ordinary people to access services that were once the preserve of the privileged.
Several factors have converged to allow this revolution to occur. The first is the boom in new technologies. Powerful microcomputers available at low prices mean entrepreneurs can achieve a great deal by working alone from their own home. The spread of smart phones is also enabling autonomous workers to react quickly and move around with ease. And thanks to the internet, complex tasks such as programming or drawing up legal documentation can be outsourced to professionals working remotely.
In short, new technologies are creating relationships that are more fluid: large companies with very strong hierarchies and a stable workforce located in physical premises are giving way to less precisely structured entities composed of a small team of leaders and a constantly fluctuating mass of contractors. They may not even have an office, but those at the top direct the business while their staff work flexibly to meet customer requests.
The swift rise of the on-demand economy has also been facilitated by the financial crisis, which led to an availability on the labour market of young, flexible workers with good access to technology. Today, 34% of US workers are self-employed. Finally, the on-demand economy is the consequence of a shift in the balance of power in society. As The Economist states, whereas Karl Marx once laid out the opposition between the owners of the means of production and their workers, the dichotomy that stands out today contrasts individuals who are cash rich and time poor and those who have less money but much more time. The on-demand economy means transactions can take place between these two kinds of economic agents, and the latter can be paid to provide the former with services that they have no time to carry out themselves.
The winners and losers of the on-demand economy
The on-demand economy has changed the capitalist paradigm, bringing about far-reaching changes within society, the world of work, and even the lives of individuals. There are positives and negatives, as with any radical change. This is why it causes so much passionate debate, as illustrated by the many legal challenges and demonstrations against Uber and the aborted attempt to legislate to limit the expansion of Airbnb in San Francisco. Its opponents regard it as a reversal of social progress and a return to the brutal capitalism of the 19th century, when long queues of workers waited every morning in the hope of picking up a day's work.
But the supporters of this new reality emphasise the flexibility it gives workers, who are free to work wherever and whenever they choose. They also highlight the freedom consumers now have to choose from a wide range of services accessible on demand at prices they can afford. The defenders of the on-demand economy also say that it enables a better allocation of resources in society. For example, many rooms that would otherwise remain empty can be offered to tourists temporarily through Airbnb, and Uber allows several passengers to share the same vehicle.
Consumers certainly appear to be holding all the cards; for workers, however, the picture is more mixed. Those who value flexibility over security benefit from the new reality. This is the case for students wanting to earn a bit of cash, those who loathe office hours, young parents who would like to work part-time while raising their children, or older people nearing retirement who want to reduce their working hours. On the other hand, workers who favour security over flexibility, such as families with mortgages and tuition fees to pay for, stand to lose out in the new economic environment. It is therefore up to governments to adapt their welfare systems to better reflect society's needs in the light of the rapid rise of the on-demand economy. The American model, where health insurance is provided by the employer, is not at all appropriate for these circumstances and ought to be reformed so that every worker is covered.
Traditional actors forced to catch up
The on-demand economy also implies a significant shake-up on the majority of markets. This is firstly because companies offering on-demand services naturally launch on existing markets, where they proceed to impose very stiff competition on the traditional players. The most striking example of this is of course the arrival of Uber on the taxi market. But secondly, the heavyweights of the on-demand economy, which have the benefit of their brand names, capital and the latest technology, can swallow up sectors other than that of their principal and initial line of business.
If we remain with the example of Uber, the company quickly realised that drivers were extremely busy in the mornings and evenings, but had far fewer jobs in the middle of the day. And so to fill the off-peak hours, it began to offer additional services. First came the food delivery service, UberEATS, then the company delivering anything, UberRUSH. From a taxi company at the forefront of technology, Uber has gradually transformed itself into a service platform devoted to nothing in particular, able to turn its hand (or its vehicles) to various types of requirements.
Besides taxis, start-ups delivering food such as Caviar or Munchery are the ones facing competition, as well as longstanding firms on the delivery market such as FedEx and UPS. The name that Uber quickly built for itself, combined with its solid IT infrastructure, has allowed it to rival institutional players in a field where it was initially an outsider. And so these firms are obliged to respond to demand and follow the lead of Uber, or to at least adapt what they offer to meet the new rules of the on-demand economy. This is why UPS has just invested 28 million dollars in the start-up Deliv, which provides a same-day delivery service. The fast food brand Taco Bell has also established its own system for delivering food. And taxis are using smart phone applications modelled on Uber ... Little by little, with missionary zeal, the on-demand economy is converting its competition rather than taking them out.
Ingrid Daerden of Aedifica is the new ‘Trends CFO of the Year’
With this award, which was presented on 20 October for the tenth year in a row, Trends and BNP Paribas Fortis are highlighting the achievements of a Belgian CFO.
Ingrid Daerden of Aedifica won the award this year, succeeding Nicolas De Clercq of Kinepolis. She owes this to a miracle 2020 in which, despite corona, Aedifica raised more than 700 million euro and got a Bel-20 listing.
In addition, the Walloon biotech group Univercells received the award for ‘Deal of the Year 2021’. Univercells raised 120 million euro from a number of prestigious investors and is preparing an IPO.
Ingrid Daerden’s great track record at Aedifica
The jury named Ingrid Daerden ‘CFO of the Year’ because of her contribution to the strategic development and financing of Aedifica’s growth. Since she joined Aedifica as CFO three years ago, the healthcare real estate specialist has enjoyed remarkable growth. During that time, the 47-year-old commercial engineer paved the way for seamless financing and built her finance team into a solid foundation for Aedifica’s growth. In 2020, the healthcare real estate company became a fixture on the Bel-20, raising over 700 million euro in capital. In June this year, it raised another 286 million euro, and in September Aedifica issued a 500-million-euro bond. In times of COVID-19 this all went smoothly. The jury also saw the integration of sustainability and ESG criteria in the financial policy.
Ingrid Daerden won over four other outstanding candidates: Charles Jacques of Masthercell, Jean-Pierre Mellen of Recticel, Nadia Messaaoui of Technord and Geert Peeters of Greenyard.
Univercells wins the 'Deal of the Year 2021'
For the third time, Trends also awarded a prize for the ‘Deal of the Year’. All mergers or acquisitions and capital operations (initial public offering, capital increase, private placement, etc.) in which a Belgian company was involved in 2020 qualify for this award. Univercells received the award. The Walloon biotech group managed to persuade KKR, an American investment company, and funds linked to the foundations of Bill and Melinda Gates and Georges Soros, to enter into its capital. This complex operation earned Univercells the ‘Deal of the Year 2021’ award.
Since 2012, BNP Paribas Fortis and Roularta have been highlighting the exceptional qualities of CFOs in Top 500 companies in Belgium. The jury’s choice is primarily determined by the strategic vision and leadership shown.
Deliverect, Odoo and Abriso-Jiffy win the Private Equity Awards 2021
On 13 October, our bank and the Belgian Venture Capital & Private Equity Association put the spotlight on these companies, as they achieved remarkable growth thanks to private equity.
A number of fast-growing Belgian companies were once again honoured at this year’s Private Equity Awards. This event highlights the role that venture capital investors play in the growth of both start-up, fast-growing and mature companies. Raf Moons, Head of Private Equity at BNP Paribas Fortis, represented our bank in the jury.
The jury had the difficult task of choosing one winner from three nominated companies for each of the three categories – Venture, Growth and Buy-out.
- The ‘Venture company of the year 2021’ category focuses on young companies developing and marketing an innovative product or service with the support of a venture capital investor.
- The ‘Growth company of the year 2021’ category is for companies that expanded their business significantly through organic growth or an acquisition policy. They brought a financial partner on board without the latter aiming for control.
- The ‘Buy-out company of the year 2021’ category focuses on the transmission and growth of companies achieved by management and a private equity investor with a controlling stake.
- Venture company of the year: Deliverect
This fast-growing SaaS company connects delivery platforms with food companies around the world. To help companies manage their delivery and pick-up operations more efficiently, Deliverect integrates food ordering platforms into the cash register system, eliminating the need to re-enter orders and the costly errors that come with them. Deliverect was founded in 2018 and is headquartered in Ghent. It employs more than 200 people.
Deliverect emerged as the winner because the company has achieved enormous growth in the short term. The company is active in 38 countries and, therefore, certainly has the opportunity to become a global player within its sector. The delivery and takeout solution developed by Deliverect is crucial to the restaurant industry and became very relevant during the pandemic.
Other nominees in this category were AgomAb Therapeutics and Imcyse.
- Growth company of the year: Odoo
Odoo is a suite of open source business apps that cater to all business needs: CRM, e-commerce, accounting, inventory, point of sale, project management, etc. Odoo has more than 7 million users, located in more than 120 countries. The company has over 1,700 employees, was founded in 2004 and is headquartered in Grand-Rosière (Walloon Brabant).
For the jury, the resilience shown by the company in recent years was one of the decisive factors in selecting Odoo as the winner. A deciding factor was also the quality of its products, which are not only very modern but also very user-friendly. Finally, the company, firmly anchored in Belgium, has a large international reach with its presence all over the world.
UgenTec and Univercells were also nominated in this category.
- Buy-out company of the year: Abriso-Jiffy
Abriso-Jiffy has evolved from a local 'bubble & foam' manufacturer to a leading European group specialising in sustainable protection and insulation materials for the packaging and construction sector. The group was founded in 1985, is based in Anzegem and employs approximately 1,500 people across 15 production sites in 11 European countries.
This company was chosen by the jury because of its track record. First of all we are talking about a successful turnaround, followed by the entry of Bencis Capital, the acquisition of Jiffy and finally the very attractive exit. This journey was accomplished by a broad-based team. In addition, ESG criteria are deeply embedded in the company’s business model, making Abriso-Jiffy a true ambassador for the Private Equity Awards.
In addition to Abriso-Jiffy, Corialis and Circet Benelux were also nominated.
Didier Beauvois, Head of Corporate Banking and Member of the Executive Board of BNP Paribas Fortis:
"As co-founder of the Private Equity Awards, we have organised this event now for the fourth time. On the one hand, to highlight successful Belgian growth companies and, on the other hand, to show how private equity can help companies. Not only innovative scale-ups, but also companies that wish to make the transition to a more sustainable business model through extra investment, have a natural need for capital. This type of investment often only pays off in the longer term. That is why, as a bank, we believe it is important to assist companies with this through our private equity offering. In this way, we can make a positive contribution to the Belgian economy and to society. We are actually freeing up additional resources for this and intend to double our private equity portfolio to EUR 1 billion by 2025."
Read the full file on Private Equity in Trends-Tendances:
- Full portrait of the winners in Trends/Tendances (Dutch/French)
- Interview with R. Moons, Head Private Equity BNPP Fortis and P. Demaerel, Secretary General at BVA (Dutch/French)
- Interview with B. Peeters and Q. Masure from Tiberghien (Dutch/French)
- Interview with M. Thumas and J. Van Assche from Eight Advisory (Dutch/French)
- Interview with M. Herlant and S. Spitaels, Associaties EY Strategy and Transactions (Dutch/French)
Belgian gaming industry gets a big push
BNP Paribas Fortis Private Equity, together with Howest and Cronos, recently founded ForsVC, the first venture capital fund to focus exclusively on the Belgian gaming industry.
The gaming industry is booming all over the world. A lot of Belgian talent works on the development of computer and video games. In recent years, there has been a true explosion of creative video game start-ups in Belgium. But still, a lot of highly skilled creative people too often go abroad.
From brain drain to brain gain
As a venture capital fund for the Belgian video game industry, ForsVC wants to combat this brain drain. In the coming years, it will invest 10 to 15 million euros in gaming. Each of the three parties is bringing its specific experience and expertise. The Kortrijk college Howest as a reputable training institute. The Cronos group as a seasoned entrepreneur and investor in technology companies, including gaming studios. And the bank as a financial expert in Private Equity.
By making capital and expertise available to promising game companies, the existing ecosystem is enriched and made a lot more attractive. Belgian companies can professionalise themselves, develop high-quality games and pay competitive salaries.
Mireille Kielemoes, managing director fund investments Private Equity at BNP Paribas Fortis: “ForsVC is what we call a “university-linked” fund. This is a specific envelope within our Private Equity portfolio which, among other things, invests in university spin-offs or innovative companies whose IP (intellectual property) has a link to universities or knowledge institutions. Through these funds, we support innovation, creativity, job creation and entrepreneurship in Belgium in promising areas. For ForsVC, we’ll also be working via a participation in the game companies, but individual games are also eligible for project funding through revenue-based lending.”Press coverage dated 14/10
Which Belgian companies will win the Private Equity Awards 2021?
On 13 October, together with the Belgian Venture Capital & Private Equity Association (BVA), we will present awards to three companies supported by private equity or venture capital. Discover the candidates.
This fourth edition once again recognises successful Belgian companies that used private equity or venture capital to finance their growth. BNP Paribas Fortis is also supporting the Private Equity Awards for the fourth time as a member of the BVA. The bank will both host the event and serve on the jury.
Raf Moons, Head of Private Equity at BNP Paribas Fortis and juror: "We believe it is important to reward the growth companies in question and also highlight private equity's usefulness as a financing solution. Private equity is an excellent tool to boost the economy. For 40 years now, we have used it to offer companies opportunities at all stages of their life cycle. Besides this, BNP Paribas Fortis also supports companies that aim to use additional investments to increase their sustainability. This type of investment will only show financial returns in the longer term, which is why we wish to support them through our private equity offerings. In this way we can make a positive contribution to the Belgian economy and to society. We are actually freeing up additional resources for this and intend to double our private equity portfolio to EUR 1 billion in the next five years."
Pierre Demaerel, BVA Secretary General: "In the past few years the global private equity market has grown considerably. In Belgium, 1,400 deals amounting to over EUR 10 billion altogether were concluded in the past six years. And this trend is increasing. It involves EUR 1.5 to 2 billion annually. However, we have noticed there is a wider audience that is still insufficiently familiar with the possibilities offered by this form of financing. That is why for the fourth time, the BVA is proud to be highlighting, together with partner BNP Paribas Fortis, several Belgian companies that have exhibited remarkable growth thanks to the support of private equity or venture capital investors."
Who will follow in the footsteps of iStar Medical, Cegeka and Destiny?
The jury has nominated nine companies. There are three nominees each for the categories 'Venture Company of the Year', 'Growth Company of the Year' and 'Buy-out Company of the Year'. The jury will announce which companies they feel have achieved the steepest growth trajectory in each category on 13 October. We are pleased to introduce the nominees:
- The ‘Venture Company of the Year 2021’ category focuses on young companies developing and marketing an innovative product or service with the support of a venture capital investor.
- AgomAb Financials is a Ghent-based biotech player that develops drugs to repair damaged human tissue.
- Deliverect, also a company based in Ghent, creates software that allows restaurants to manage their online orders and integrate these into their existing cash register system.
- Imcyse is a Liege-based biopharmaceutical company that pioneers the development of a new class of immune technologies for the treatment of serious auto-immune diseases.
- The category ‘Growth Company of the Year 2021’ is for companies that expanded their business significantly through organic growth or an acquisition policy. They brought financial partners on board without the latter desiring control.
- Odoo from Ramillies in Wallonia develops open-source management software for SMEs. With over 10,000 fully integrated apps, the company offers solutions for the full automation of business processes.
- UgenTec from Hasselt develops pioneering lab software for the automation of DNA analyses, making it possible to detect respiratory infections, STIs and various types of cancer much faster.
- Charleroi-based Univercells develops technologies for the production of low-cost and large-scale vaccines. This company has won the confidence of many (inter)national investors, including the Bill & Melinda Gates Foundation.
- The category ‘Buy-out Company of the Year 2021’ focuses on the transmission and growth of companies achieved by management and a private equity investor with a controlling stake.
- Anzegem-based Abrios-Jiffy is a leading manufacturer specialising in the extrusion of sustainable, innovative, protective and insulating materials for the packaging and construction industry.
- Corialis in Lokeren designs and manufactures high-quality, technologically advanced aluminium systems for in-wall (windows, doors, sliding elements, roofing systems, curtain walling), indoor (partition walls, walls, fire protection doors) and outdoor (balustrades, greenhouses) applications.
- Esas from Wilrijk, which will be renamed Circet Benelux in future, is a service provider for the installation, maintenance and management of smart devices in sectors such as telecom and energy. The company also handles the construction and maintenance of coax, optical fibre and mobile networks for large telecom companies.