An IT services company with EUR 6 million in revenue that needed capital and structure to scale. In three years, it tripled its team, expanded to three new cities, and reached EUR 14 million. A case study on how to grow without losing your essence.
Names, locations, and certain details of this case have been modified to protect the confidentiality of the parties involved. The figures and results are representative of the actual transaction.
An IT services company — consulting, bespoke software development, and systems integration — founded in 2010 by two engineering partners in a mid-sized city. Fifteen years later, 48 employees, a portfolio of 35 corporate clients, and EUR 6 million in revenue.
On paper, a success. In reality, a company that was trapped.
The two founders had created something valuable: a high-calibre technical team, an excellent reputation among their clients, and enviable profitability — EBITDA of EUR 840,000, 14% of revenue. But they had hit the ceiling of their local market. Every large client in their city was already theirs or had decided not to be. Organic growth over the previous two years had been 3% — barely above inflation.
The opportunities were elsewhere. Several clients were requesting services in other cities. Larger competitors — with a national presence — were winning projects not on technical quality but on geographic coverage. And the most ambitious talent on their team was beginning to look toward larger companies offering mobility and more diverse projects.
The founders knew what they needed. Capital to open offices in Madrid and Barcelona. The ability to hire 20-30 professionals in 18 months. And — this they acknowledged less readily — management structure. They had reached 48 employees managing as they had when they were 15: no operations director, no formal sales processes, no human resources department. Everything depended on the two of them.
They contacted us through an article we published on growth in the middle market. The first conversation lasted three hours.
The diagnosis confirmed what the founders sensed. The company was excellent technically and primitive operationally. It had the raw material to triple its size — brand, talent, satisfied clients — but lacked the fuel (capital) and the engine (management structure) to do so.
We designed a three-year expansion plan with three axes:
Geographic expansion. Opening offices in Madrid (year 1) and Barcelona (year 2), combining direct hiring with a small acquisition in Madrid to accelerate.
Investment in talent. A hiring plan for 40 professionals over three years, with an onboarding, career development, and retention programme that did not exist.
Management professionalisation. Operations director, commercial director, HR manager, and a project management system that would allow quality delivery at scale.
Blue Mountain acquired 40% of the company through a combination of share purchases from the founders (providing them with personal liquidity) and a capital increase (injecting resources into the company to fund the expansion). The two founders retained 30% each.
The shareholders’ agreement structure was carefully designed:
Total committed investment was EUR 2.4 million: EUR 800,000 in liquidity to the founders and EUR 1.6 million in capital for the company.
The micro-acquisition. We acquired a consultancy of 8 people in Madrid — a senior team with 12 corporate clients and a cybersecurity positioning that complemented the platform’s offering. The founder of this company was 60 and wanted to exit gradually. We offered him a two-year contract as Madrid office director and an earn-out linked to client retention.
Hiring. 14 new hires in the first year: 8 in Madrid (in addition to the 8 from the acquisition) and 6 at headquarters. The selection process was slow and selective — the founders insisted that every candidate undergo a technical interview with them, and they were right: team quality was the foundation of everything.
Professionalisation. We brought in an operations director with experience scaling services companies. We implemented a unified project management system (tools, utilisation metrics, margin tracking by project). And we created a formal commercial process with pipeline, forecasting, and account-level targets.
The first year was tough on profitability: EBITDA fell to 9.2% of revenue. The Madrid office was not yet profitable, mass hiring generated training costs, and the new processes required founder time that had previously been spent on billable projects.
Barcelona opening. This time without an acquisition — pure hiring. A senior office director with a contact network in the Catalan market and an initial team of 5 professionals. The advantage: the brand was already better known thanks to the Madrid work, and three headquarters clients had Barcelona operations requesting local service.
Madrid consolidation. The Madrid office reached profitability in month 14. The acquisition was fully integrated: cybersecurity clients began buying development services, and development clients began buying cybersecurity. Cross-selling worked better than projected.
Talent as competitive advantage. We launched an internal training programme (the “technical academy”) offering each employee 80 hours of annual certified training, funded by the company. The effect on retention was immediate: turnover fell from 18% to 9% — an enormous differential in a sector where talent is fought over through salary alone.
Commercial growth. With three operational offices and a team of 92, the company could compete for projects that had previously been out of reach: framework agreements with large corporations, digital transformation projects requiring teams of 10-15, and recurring maintenance services generating predictable revenue.
Vertical specialisation. We decided to focus on three sectors — banking, industry, and energy — rather than trying to be generalists. Specialisation enabled the development of reusable assets (frameworks, accelerators, sector knowledge) that improved margins and shortened sales cycles.
The complete management team. Managing director (one of the founders), operations director, commercial director, technology director (the other founder), HR manager, and financial controller. A structure that could manage growth without everything depending on two people.
| Metric | Start | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|
| Revenue | EUR 6.0M | EUR 7.8M | EUR 10.6M | EUR 14.2M |
| EBITDA | EUR 840K (14.0%) | EUR 720K (9.2%) | EUR 1.1M (10.4%) | EUR 1.7M (12.0%) |
| Headcount | 48 | 62 | 78 | 95 |
| Offices | 1 | 2 | 3 | 3 |
| Active clients | 35 | 52 | 71 | 94 |
| Recurring revenue | 15% | 18% | 28% | 35% |
| Staff turnover | 18% | 14% | 9% | 8% |
Revenue growth was 137% over three years. But the indicator that created the most value was recurring revenue: from 15% to 35%. Maintenance, support, and cybersecurity services generate predictable revenue, high margins, and permanent client relationships — the type of revenue that multiplies the valuation of a services company.
The EBITDA margin initially dipped — the typical J-curve of companies in expansion — but by the end of year 3 was already approaching the initial level, on a revenue base 2.4 times larger. The projection for year 4 places EBITDA at 13-14%, matching the pre-expansion margin on revenue of EUR 16-17 million.
In our experience, professional services companies are exciting but demanding investments. The principal asset is people, and people cannot be bought — they are attracted, developed, and retained. This radically changes the nature of the investment.
Talent is the bottleneck, not capital. In an industrial company, capital buys machines that produce more. In services, capital buys time to find, train, and integrate people. If you hire poorly or too quickly, you destroy value rather than creating it.
Culture scales worse than processes. The founders had created an excellent culture with 48 people. Maintaining it with 95, across three cities, required conscious and constant effort: quarterly in-person gatherings, the technical academy, cross-office projects, and regular visits by the founders to every location.
Founders as the differentiating asset. In this case, the two founding partners were the company’s soul. Keeping them motivated, with a clear role and an economic incentive aligned with growth, was the most important decision of the entire operation. Founders who retain their passion are more valuable than any hired executive.
If you have built a services company with an excellent team and are wondering how to take the next step — more clients, more cities, more scale — without losing what makes you special, let’s talk.
Founder of Blue Mountain
Over 15 years investing in Spanish companies with patient capital. Expert in business succession, corporate governance, and middle-market investment.
By Dirk Manuel Martens Jiménez
By Dirk Manuel Martens Jiménez
By Dirk Manuel Martens Jiménez
If you wish to explore a potential collaboration or present an investment opportunity, we invite you to contact us. We guarantee absolute confidentiality in all our conversations.