The Drooms success story began 20 years ago with a large order from a major German bank. Today, the digital pioneer is the leading provider of virtual data rooms in Europe. The road there was anything but easy.
It all started 20 years ago: two determined young men, a stag party and the business idea of bringing order and efficiency to the data room chaos that reigned at the time, which literally consisted of rooms piled high with mountains of documents.
Jan Hoffmeister and Alexandre Grellier had not known each other all that long when they landed their first major project. Only shortly before, they had been introduced to each other at a mutual friend’s stag party in Lugano with the words “You two should work together sometime!” The time-consuming work of collecting, reproducing and filing data and documents was a thorn in both their professional lives.
The first order landed by the two young entrepreneurs consisted of the six-fold reproduction of 900 folders of documents and depositing them in a physical data room as part of a due diligence process for a major German bank. The two had six weeks to do this – and so Drooms was born.
It was something of a baptism of fire. In order to get on top of the mountains of paper, Hoffmeister and Grellier set up an improvised production line and hired students in Frankfurt to take over the laborious task of scanning and copying the documents. But surely it could be done faster?
The history of a digital transformation
Hoffmeister and Grellier developed the business idea of organising data rooms digitally and consequently faster, more efficient and economical. Hoffmeister, who had years of experience in the M&A business at Siemens and Grellier, who had originally worked at Lehman, realised that they had hit the mark with their idea, because the demand was massive.
Their concept resonated well with a great many companies. “In 2003, not many market players were even aware that data rooms could be organised digitally and most had not even conceived of the idea in the first place”, Hoffmeister remembers.
However, the idea gradually gained acceptance with a steadily growing number of customers: initially, data rooms were set up on carriers such as DVDs. From 2006, Drooms was then able to launch its initial purely virtual data room on the Web 2.0, which still represent the company’s core service today. Drooms is also a living testament to the digital transformation, a monumental turning point that began in the late 1990s – little by little at first and then with increasing momentum as more and more sectors of the real estate industry got on board.
“In the early stages of Drooms, we were able to double our revenue year on year”, Grellier reports. By 2008, Drooms was already generating more than five million euros in sales. After that, the aim was to grow fast – at least that was the partners’ plan – and not even the financial crisis was enough to stop them. “We definitely felt the effects of the 2008 and 2009 financial crisis very deeply: following the Lehman bankruptcy, phones stopped ringing for weeks and our cash reserves melted like ice cream in the sun”, says Grellier.
However, things soon started to look up again for Drooms, partly because digital solutions were becoming increasingly prevalent in the market.
The success story continues
Currently, more than 10,000 assets are managed on the Drooms platform and its market share in commercial real estate transactions is over 60% in Germany alone. More than 30,000 companies around the world currently use the software, including leading global real estate companies, consultancies, law firms and corporations. In the process, Drooms has also radically revolutionised corporate due diligence. “With the help of our digital data room, we have reduced the workload for all those involved by at least 70%. As a result, the time it takes to complete a transaction has reduced by a matter of weeks”, says Grellier, adding that as a result, Drooms has also played an important part in further digitising the market as a whole and making it more efficient.
Drooms has since grown beyond the borders of the DACH – Germany, Austria and Switzerland – market and has established itself in core European markets, with a total of nine locations in seven different countries. For Hoffmeister and Grellier, maintaining the spirit of the early years, always staying adaptable and anticipating change, is key. Continuing to value their employees is also vitally important to the entrepreneurs: “We still have colleagues at our company today who have been with us since the founding years. Our employees were and remain our greatest asset”, say the two founders.