24Flow raises EUR 1 million and aims to become European market leader

By Francis Muyshondt

Ghent-based production platform 24Flow has raised EUR 1 million to fund its future growth. Among others, Piet Maes, Lode Peeters and Jef Wittouck stepped in. And the group is ambitious as it aims to become the European market leader in the High-mix low-volume market. So there is no shortage of ambition. Hence, we asked what makes the group so special and how it plans to achieve that market leadership. We had a chat with Stijn Wijndaele, who co-founded the group in March 2020. The group's objectives, market potential, practical applications and origins were reviewed in detail.

In a nutshell, what does 24Flow do? 

Stijn Wijndaele: 24Flow is an operations platform built for manufacturing companies with a high-mix, low-volume nature, where unpredictability and variation reign daily. Think of machines breaking down, deliveries delayed or employees unexpectedly absent. And the company helps companies plan flexibly, make processes transparent and increase operational agility. And the system is built by practitioners, for practitioners.

And where does the company's origins lie?

Stijn Wijndaele: Its origins lie with Erik Dierinck, former production manager at Newtech (later part of ST Engineering). From that role, he experienced daily how difficult it was to use existing tools such as ERP or planning systems (APS) in a reality that was constantly changing. His IT background led him to the realisation that you should not try to model that complexity, but rather make your organisation flexible to deal with change. That led to the discovery of Salesforce as a low-code platform: technology that allows to build fast, modular and customised solutions. Thus was born the first version of what would later become 24Flow. Erik and I found each other through a shared passion for business process optimisation, born during a course at Vlerick. Together, we first founded ScaleFactory, a services company through which we built Salesforce solutions for other companies, which gave us the necessary financial breathing space to develop the product further. With support from VLAIO and pilot customer CGK, we built the 24Flow platform step by step.

What are your objectives?

Stijn Wijndaele: Our ambition is clear: in the long term, we want to become the market leader in Europe within the High-mix, low-volume market. This is our BHAG, our Big Hairy Audacious Goal, a bold but achievable long-term goal. We realise that this is not a sprint, but a journey that will easily take 10 years. To achieve this, we follow a step-by-step approach we call the "pinball game" ourselves. In the first phase, we focus on becoming a market leader within the niche of machine builders. This choice is strategic: machine builders are often larger companies, with several branches, and provide a solid base to build on. Hence, our existing customer, Voortman is a strong reference. From there, we want to expand our position step by step.

What will you do with that EUR 1 million? What's in store?

Stijn Wijndaele: We will work on three pillars. So far, we have grown mostly organically, with limited focus on sales and marketing. With this investment, we want to accelerate this. We will focus on visibility, lead generation and building a scalable commercial approach. Secondly, to sustainably support our growth, we want to build a strong partner network. We believe collaboration with delivery partners is crucial to remain scalable over time without losing our quality or speed. Our existing customers are demanding more and more value, and we want to be proactive in responding to that. Thirdly, by further expanding and deepening our product, we can tap new markets and deliver projects faster. This is how we stay relevant and future-proof.

Why didn't you collect more? Stijn Wijndaele: For us, funding is a means, not an end in itself, and that sets us apart from some other companies, if I may say so. In our case, we could have raised 2 million euros without any problem. We believe in steady yet rapid growth. This is also at the heart of the business plan we have submitted. In that context, even a €1m investment round is enough to realise our plans. Of course: what the future holds cannot be predicted I don't have a crystal ball. But if at some point it makes strategic sense to raise additional capital to achieve our objectives, we will certainly do so. What we will not do is raise money for the sake of raising it, or burn it for the sake of burning it.

How have contacts with investors grown and what role will they play in the further expansion of the company?

Stijn Wijndaele: Contacts with investors have grown organically. Initially, we talked to traditional VCs, but their short-term vision clashed with our long-term ambition. That is why we deliberately chose experienced business angels with a strong network and the resources to build with. Through my years of involvement with VOKA East Flanders, including through the TechTrips, I have built valuable relationships, such as with Piet Maes of Sofico and Winter Circus. Lode Peters, chairman of Agoria, also joined through a friendly connection. After an initial conversation in October, we kept him regularly updated. He eventually took the initiative for the investment round and stepped in as lead investor. But our investors bring more than capital: they also provide operational support through our advisory board, chaired by Jef Wittouck. In that council, we explain our strategy and growth plans and are challenged on substance. In addition, I have a direct line with each of them via WhatsApp so we switch quickly and informally. Jef brings in-depth knowledge of the manufacturing industry, Lode sharply challenges us in terms of figures and business planning, and Piet, with his experience at Sofico, one of the biggest tech successes in East Flanders, supports us from a technical and platform-oriented angle.

Your company description states that you want to accelerate the digital transformation of the make-to-order manufacturing industry. Can you explain this?

Stijn Wijndaele: If we look at the total global market for our solution, we are talking about a total addressable market of around €15 billion. Within Europe, we focus on a €900m market that is companies that are technologically ready to work with a platform like 24Flow. For Benelux alone, the market is around €90 million. What is driving this digital transformation today are several trends. First, the increasing demand for customisation what we call the customisation trend. Consumers increasingly want personalised products at standard prices. There is also the 'Coolblue-expectation: manufacturing companies still too often work with manual tracking and phone calls, while customers today expect to be able to track where their order is in real-time. Our solution makes that possible, provided the business is ready. Furthermore, we also see companies betting on more local production due to uncertainties, think brexit, corona, the war in Ukraine and recent US protectionist measures. That reshoring trend calls for greater agility and resilience, for which digital tools like ours are crucial. Finally, there is a technology driver: the emergence of composable apps architecture. 24Flow is a modular platform. Companies can start small with a few features and expand incrementally.

Aren't your target markets in Belgium and Europe too small? Why doesn't the company go to the US?

Stijn Wijndaele: A fair question. It would be tempting to move to the US immediately, but the reality is that there, with no existing customer base or local foothold, you need huge budgets for a very uncertain return. In Europe, meanwhile, there is at least as big a challenge. Productivity here has been quasi-stagnant for the past 30 years. In other words, we have a burning platform here. European manufacturing companies must digitise to remain competitive. That just creates a huge opportunity for solutions like ours. This is why we deliberately start in the Benelux: a recognisable, accessible market where we can quickly build traction. From there, we want to expand Europe-wide, and eventually internationally, but on the follow-the-customer principle. Many of our customers, such as Voortman or Atlas Copco, have international branches, including in the US. If they want to deploy 24Flow there, we will go with them.

So your solution is not applicable to every manufacturing company? And how do you find the companies that are ready?

Stijn Wijndaele: Basically, technologically we can help almost any company, we will find a solution for that. Technology is actually the least of our worries. What is much more important is the company's maturity in terms of process thinking. If that is missing, then no digital platform will help. This is why we deliberately look for companies with the right mindset and a mature view of their production processes. Digital transformation requires structure and vision; if these are not in place, our solution will not work optimally. We therefore focus on companies that we know usually have that maturity. This is often related to scale. Whereas our lower limit used to be at 10 million euros in turnover, today it is more likely to be between 30 and 50 million. Our real sweet spot is companies with turnover between 50 and 500 million euros. These are typically medium-sized players that are already organised but not yet flexible enough to move quickly. Big names like Atlas Copco or Brady are exceptions, they came to us, not the other way around. We proactively focus on niches in which we are strong: mechanical engineering, metal processing, fixtures such as windows and doors. Companies with unique needs where we can really make a difference with 24Flow. And with our recent capital round, we now want to use that commercial approach a bit more vigorously: a bit more proactive, a bit more aggressively, to reach even more of the right companies.

How does the follow-up work once a customer is on board? Is 24Flow evolving with the customer?

Stijn Wijndaele: We work according to the train-the-trainer principle. Clients provide an internal project manager who works with us to shape the project in weekly sprints. So we not only build fast, but also tailor it to their production processes. Under the bonnet, 24Flow runs on Salesforce, a flexible and user-friendly platform. By actively involving customers, they learn about the system and can use it independently afterwards. ORAC is a great example of this: they have rolled out 24Flow entirely by themselves at their site in Slovakia. Our goal is for companies to become self-reliant. This allows them to respond faster to feedback from the shop floor. Because today, technology is no longer the bottleneck, it's about adoption and agility.

What are the immediate, tangible effects of a 24Flow installation?

Stijn Wijndaele: In high-mix, low-volume manufacturing, we often see that up to 95% of lead time consists of waiting times for people, materials or approvals. 24Flow supports the Quick Response Manufacturing (QRM) methodology, which focuses on just that: eliminating waiting time. Turnaround times can thus drop by 30%, which immediately leads to 30% less work-in-progress and lower shop floor pressure. That has a direct impact on the bottom line. In addition, we support in-process quality control. Classic systems focus on ERP and machines, but forget about the operator. We guide the worker step by step, leading to fewer errors, less waste and higher efficiency. This approach also gives companies real-time insight into orders and bottlenecks. Thus, we bring not only time savings, but also data and control to the highest level.