Learn why Tilman Au consolidated multiple companies to form diva-e and acquire PE funding, the lesson Tilman learned after two attempts at growing a company with private equity the advantages and disadvantages of working with a private equity firm, and much more.
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Read time: 6 minutes
In the world of consultancy, there are those who aim not just to succeed, but to transcend industry norms and set new benchmarks for growth.
diva-e, a company that started with a vision, a handful of entrepreneurs, and a commitment to excellence, achieved precisely that.
In this case study, we explore the remarkable story of how Tilman Au ()’s company diva-e transformed from a €40 million business into a thriving €100+ million enterprise within seven years, thanks to a strategic alliance with private equity firm Link Broken.
Let's jump in.
Large companies are looking for large consulting players to collaborate with. So if you want a chance to work with major clients, you need to grow.
This desire to access big clients and big projects was a fundamental driver behind Tilman’s choice to collaborate with other consultancies and acquire PE funding.
But there are more advantages to size than simply landing big deals.
“It's all about size. If you are a 100-person company, you can't offer a career track for your people. So, you have no international offices, you have no strong cross tracks” - Tilman Au, CEO of diva-e
By making diva-e a big industry player, they experience a number of benefits.
These include:
Tilman also mentioned that in order to acquire PE funding, it was necessary to group several companies together.
He said:
“The only chance is if you go as PE sponsor on that market to group the companies together, otherwise you start with a very small target and that's not the way private equity acts.” - Tilman Au, CEO of diva-e
Tilman started his first company immediately after leaving university.
After 15 years of hard work growing this company alone, he made a successful exit after selling it to EQT Partners, a Swedish private equity firm.
But the process wasn’t all smooth sailing.
“I thought I'd seen everything as an entrepreneur. But, when I first got in contact with private equity, I learned a lot about how to go in a really professional direction in your industry, even if you're not familiar with it.” - Tilman Au, CEO of diva-e
The biggest challenge?
Dealing with 25–30 entrepreneurs from different companies, each with different ideas about the direction in which the company should go.
This misalignment led many of the original founders, Tilman included, to leave the company after a lockdown period of two years.
The company lost its DNA, more people left, and the business suffered.
So what did Tilman do differently in his second venture with diva-e?
He focused on finding entrepreneurs with a shared vision.
“We said, ‘Okay, let's get rich together.’ So we didn't search for entrepreneurs who wanted to sell their companies. We searched for entrepreneurs who wanted to make their company larger and play a larger game.” - Tilman Au, CEO of diva-e
In forming this vision, the companies at diva-e were driven by the idea to build something bigger: to become one of the market leaders in Germany.
This vision would become the glue that bonded the whole company together.
But Tilman didn’t stop there.
“He had a list of target companies and a pre-discussed post-merger integration book of 100 pages with everybody who had bought into the leadership structure: who is in charge of sales, or marketing, or certain verticals. So, it was clear they’d dropped their company names. So that was all worked out and pre-agreed. There was an agreed-on concept when they hit the road. That was really compelling and attractive for us.” - Kai Köppen, Partner at EMERAM Capital Partners
According to Kai Köppen, Partner at EMERAM Capital Partners, Tilman went the extra mile to make diva-e a no-brainer investment for a private equity firm.
After years of being your own boss, deciding who to work with, who to hire, and how to grow, how would you feel about suddenly having to answer to somebody else?
Many entrepreneurs would shudder at this idea.
Having your strategic decisions influenced by a PE firm and being told which KPIs to hit is a major concern for most business owners considering PE funding.
But are these concerns valid?
According to Tilman, the benefits far outweigh the negatives.
“My first mentor always said, ‘even if you have your own company, you're always reporting to somebody.’ Maybe it's your wife, or your bank, or your partner. So, from my personal perspective, there is no huge change.” - Tilman Au, CEO of dive-e
Besides the obvious benefits of PE funding, such as obtaining the financial muscle needed for rapid growth and acquisitions, Tilman also had access to EMERAM’s network of highly skilled professionals: former management consultants from companies like McKinsey, Bain, and BCG.
Whenever Tilman had a question that needed to be answered, these people were just a phone call away.
“I can call Kai, Chris, or any of the other guys every time I have a question, and we challenge it. I think that pushed me forward in the company.” - Tilman Au, CEO of diva-e
The support of a well-established PE firm like EMERAM helps diva-e to streamline its operations, optimize performance, and establish a structured approach to scaling the business.
The story of diva-e and how Tilman Au acquired PE funding from EMERAM Capital Partners reminds us of the importance of learning from experiences.
When Tilman’s first experience with PE funding backfired, he could have thrown in the towel.
Instead, of saying, “I’m never doing this again,” he said, “I can do it better this time.”
Had Tilman been the type of person to give up, he would never have seen diva-e become the €100+ million enterprise it is today.
Big congratulations to diva-e and EMERAM for their incredible work!
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Learn why Tilman Au consolidated multiple companies to form diva-e and acquire PE funding, the lesson Tilman learned after two attempts at growing a company with private equity the advantages and disadvantages of working with a private equity firm, and much more.