Season 10 - The second round of fundraising

Episode 7 - September-October 2022 - As it drags on, our partners are getting impatient

Romain Payet — Now’s the time for us to slow down. The VCs said no, the infrastructure fund let us down at the last minute and our liquidity level is low. But we still want to take the time to plan the rest of the Midnight Trains adventure calmly. With the help of the investment bank we’ve chosen, we’re rethinking certain elements of our business plan, so they correspond to our new plan: to be entirely financed by an infrastructure fund while keeping the ROSCO by our side. To achieve this, we’re establishing a new set of targets that are both broad and specific. We have high hopes for some of the funds on this list. Much less in others, but we must strike out very broadly to keep all the chances possible on our side.

The only problem is that this slowdown time isn’t easy for everyone to understand, starting with our immediate partners, with whom we’ve always been transparent. From the start, we decided to explain to them the challenges we face and the unprecedented dimension of the project. We were honest about our successes and setbacks. We were constantly in education mode as we convinced them to follow us, and took them through all these challenges with us. Even when, like this moment, we feel like we need to take our time.

The ROSCO, for example, is holding us to account, which is quite normal. They’re getting impatient, as they need to deploy capital, which they use to acquire railway assets. This is its fundamental mission and, faced with the setbacks we’ve suffered, its teams feel a little stuck. They ask us which infrastructure funds we’re going to contact next, who will finance us and so on. They had been really reassured by the three-pronged scenario: Midnight Trains, the ROSCO, and the infrastructure fund. So we need to take time explaining to them that if we delay things a little, it’s only to get off to a better start. And, during our final roadshow, this financing becomes a reality.

Nicolas Bargelès — For its part, the manufacturer is also a little worried, as they’re not used to being made to wait like this. In the past, they’ve worked with public clients, without the slightest issue with financing. Things always work the same way: responding to a call for tenders, finalising specifications, establishing a final price, validating the price with the client and, finally, starting construction. With us, everything is different. Particularly in terms of the rhythm. At the beginning of 2022, two ROSCOs passed through their workshops, and we were exchanging all the time, in situ and by email. Things moved quickly, especially when discussions with the infrastructure fund started. The story was so great that everyone wanted to believe it, especially us. Everyone envisaged completing the financing fast, under exceptional conditions, and with one of the largest funds in the world. But things didn't turn out that way, and the manufacturer began to worry. We learned later that the manufacturer wondered if we were serious about this private train thing. Again, we took the time to explain what we were going through, what differed from a public client, and that it was all normal. And the ROSCO gave us a serious helping hand on this one. First, it reassured the manufacturer on a call. Then, one of its leaders went with us to Poland to make things clear and show that it was by our side.

On another note, there’s SNCF Réseau, the French infrastructure manager. By then we had already established good rapport with the teams. We challenge them on work issues, the possibility of using certain lines when others are closed, and the coordination of infrastructure managers. Better yet, we have finalised our train route’s hourly requirements for 2024. So they’re a little surprised when we tell them that we probably won’t run with this deadline, because of the delay in our financing. They expected a little delay, because all new entrants have them. Like us, they didn’t imagine that clearing this route would take us so long. However, they know the sector and are quick to understand the nature of our obstacles.

Adrien Aumont — Finally, there are our more informal partners: our loved ones, our future teams and, of course, our readers. The former don't always understand what happens in the daily life of Midnight Trains. And it’s not always easy to explain the subtleties of financing models between cheese and dessert. It’s not easy to justify why we’re on top of the world in January and why that’s no longer the case in August. Fortunately, they’re unfailingly supportive. As for our future dream team, it’s already been formed. It’s just waiting for a signal from us and for us to start the machine. In the meantime, we’re organising meetings twice monthly, so that they experience the start of adventure with us, and don't miss anything. Finally, there’s you, our readers, to whom we tell everything we’re legally allowed to. And you’ve been faithful from the start. You’ve asked questions that help us move forward and give us strength. There are 40,000 of you every week reading and supporting us. So we want to take this opportunity to say thank you again.

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