Fintech · Pre-Series B Due Diligence

Anonymized case study. Key data points have been adjusted to preserve confidentiality.

The context: fintech due diligence

B2B fintech, 120 employees, €8M ARR. A growth equity fund is considering a €15M Series B. The company shows 60% Y/Y growth, but the fund wants to understand the quality of that growth before signing the term sheet.

The question isn't "is it growing?" but "will the machine producing that growth hold up at scale?"

The fund's request

"We want an X-ray of the revenue machine. Not the numbers, we already have those. We want to know how it's built, and whether it will hold up at scale. We've already invested in companies that were doing +60% and collapsed to +20% the moment the market tightened. We don't want to make that mistake again."

The fund commissioned the Revenue Health Score as part of operational due diligence, alongside the standard financial and legal audit.

What the diagnostic revealed

Revenue Health Score: 51/100: Needs consolidation

Warning signs:

• CSM (22/100): No customer Health Score. No book segmentation by value, usage, or churn risk. CSMs manage their accounts reactively: they step in when the client calls, not when warning signs appear. NRR at 87%, meaning the installed base is shrinking by 13% a year. To sustain 60% growth with an NRR under 90%, the company must acquire 73% in new business every year. That pace isn't sustainable.

• Sales (68/100): Solid sales methodology on new business, a competent team, but no structured expansion process. Upsell is opportunistic: when the client asks, not when the opportunity arises. No expansion playbook. No trigger events identified. No formalized collaboration between CSM and AE on existing accounts. The expansion potential of the installed base is completely underexploited.

• Management (35/100): No structured Revenue Review. Steering relies on the VP Sales's experience and intuition rather than on data and process. No SLA between Marketing and Sales. No shared definition of MQL and SQL. The forecast is built "bottom-up" by the AEs without validation or challenge, which explains an average 30% gap between forecast and actuals.

"We wanted to invest with confidence. The Revenue Health Score gave us the framework we were missing." · Partner, investment fund

The impact on the investment decision

The fund invested, but with a remediation plan as a condition of the term sheet. The diagnostic provided the concrete elements needed to structure that condition:

1. An objective score of operational maturity: the Revenue Health Score of 51/100 set a measurable baseline. The fund wrote a target of 70/100 within 12 months into the shareholders' agreement, with re-scoring planned at 6 and 12 months.

2. Precise risk identification: NRR under 90% was identified as the primary risk. The fund understood that the reported growth was masking a retention problem that, if left uncorrected, would make the model unviable within 18 months.

3. A costed 12-month action plan: structuring the CSM function (hiring a Head of CS, implementing a customer Health Score, segmenting the book), setting up an expansion process (upsell playbook, automated triggers, expansion targets for AEs), and instituting a monthly Revenue Review at board level.

4. Tracking KPIs for the board: NRR, logo retention, expansion rate, and Revenue Health Score as quarterly indicators presented to the board. The diagnostic provided the framework the board will use to steer the transformation.

The results after 9 months

The shift in NRR from 87% to 118% fundamentally changed the company's economics. With an NRR above 100%, the installed base grows mechanically every year, which reduces the pressure on new business acquisition and improves revenue predictability. That's exactly what the fund was looking for: a revenue machine capable of growing sustainably.

Next step

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