Seeking growth capital, eyeing a software exit, or exploring Europe’s private equity scene? This article is your go-to guide!
In this article, we delve into the most active private equity investors in the software space, providing a detailed summary of their geographical focus, investment criteria, exit horizon, and geographical presence. Private equity firms are increasingly investing in software companies for their significant growth potential, recurring revenues, robust margins, and efficient capital utilization. They prioritize businesses with established revenue streams and loyal customer bases—perhaps your business fits the bill?
For this analysis, we define software companies based on the MergerMarket classification, which includes application software, software development, system integrations, and operating systems. Our dataset includes approximately 10,800 software investments made by 2,731 financial investors across all stages of the company lifecycle. In this article we highlight the top 10 software private equity firms in Europe, ranked by deal activity from 2014 to today (June 11, 2024). Our research covers investments ranging from growth investments to buyout deals, with double digit equity stakes all the way to 100% buyouts.
Software investments by private equity firms in Europe between 2014 and 2024
According to league tables, the top five private equity firms collectively account for approximately 8% of all investments in European software companies. Main Capital Partners leads this group with 143 investments during the observed period. Please note that the add-on acquisitions made by the portfolio companies of the PE funds are included in the totals.
Overview of the top 10 software private equity investment firms in Europe, measured by deal volume
Accel, SpeedInvest, and BpiFrance were omitted because of their venture capital profile and replaced by the next most active funds, including Providence Equity Partners, LDC (Lloyds), and Waterland Private Equity.
Detailed profile of the top 10 most active PE firms investing in Software
1) Main Capital Partners
Overview: Main Capital Partners B.V. is a private equity firm based in the Netherlands, specializing in growth capital, middle market transactions, and special situations such as turnarounds and secondary buyouts. The firm focuses on enterprise software, SaaS, media, and technology sectors.
Geographic Focus: Main Capital Partners primarily invests in companies based in the Benelux (Belgium, Netherlands, Luxembourg), Nordic region, and DACH region (Germany, Austria, Switzerland).
Investment Criteria:
- Equity Ticket: Between €5 million and €150 million per transaction
- Enterprise Values: Unspecified
- Revenue: Between €3 million and €100 million
- Stake: Prefers majority stakes
- Exit Horizon: Typically three to six years
Key Offices: The Hague, with additional offices in Belgium, Düsseldorf, Stockholm, and Amsterdam
2) Hg Capital
Overview: HgCapital is a private equity firm focusing on direct investments in leveraged buy-outs, growth companies, and vertical market software across various sectors. They target consumer, healthcare, industrials, leisure, telecom, media, and technology industries. Hg Capital’s investment activities and fund-raising are conducted through various private equity funds, particularly focusing on technology investments in the year 2021.
Geographic Focus: Primarily North America and Europe, with a strong emphasis on the UK, USA, Nordic region, and Germany.
Investment Criteria:
- Equity Ticket: Typically between £30 million per transaction
- Enterprise Value: Unspecified
- Deal Sizes: Range from $50 million to over $9 billion
- Stake: Considers majority or minority stakes
- Board Representation: Seeks board seats in portfolio companies
Key Offices: London, Munich, Paris, San Francisco, and New York
3) Insight Partners
Overview: Insight Partners is a venture capital, private equity, and growth equity firm investing in expansion capital, growth equity and buyouts. It primarily targets the technology sector, including consumer-facing tech, e-commerce, internet, mobile, SaaS, infrastructure software, B2B commerce, post-secondary education, and data-enabled services.
Geographic Focus: Global
Investment Criteria:
- Equity Ticket: $3 million to $500 million per transaction
- Deal Sizes: Varies widely
- Stake: Majority and minority investments, primary and secondary shares, co-investments
- Board Representation: Seeks board seats in portfolio companies
Key Offices: New York, with additional offices in Europe, Asia, North America, and South America
4) TA Associates
Overview: TA Associates is a private equity and venture capital firm specializing in a wide range of investments, including equity, minority recapitalizations, and leveraged recapitalizations. The firm focuses on mid-market and mature companies across various sectors globally, with a significant emphasis on investing in tech companies.
Geographic Focus: Global, with a focus on North America (USA), Europe, Asia (India, Greater China, Korea), Scandinavia, and other emerging markets.
Investment Criteria:
- Equity Ticket: $5 million to $600 million in equity per transaction
- Enterprise Value: $50 million to $5 billion
- Stake: Majority or minority positions, without operating control. Seeks board seats or board-level advisor roles
- Board Representation: Seeks board seats or board-level advisor roles
Key Offices: Boston, Massachusetts (headquarters); Austin, Texas; Menlo Park, California; Mumbai, India; Central, Hong Kong; London, United Kingdom
5) Eurazeo
Overview: Eurazeo is a private equity and venture capital firm specializing in growth capital, acquisitions, leveraged buyouts, and buy-ins of private companies. The firm invests in both mid-market and listed public companies, targeting medium-sized or large companies, SMEs, high-growth companies, and real estate management and investment activities.
Geographic Focus: Primarily invests in the United States, France, Italy, North America, and other European countries.
Investment Criteria:
- Equity Ticket: €50 million to €250 million in small-mid buyouts; €25 million to €100 million in growth businesses; €10 million to €40 million in healthcare research; $1.17 million to $600 million overall
- Enterprise Value: Typically less than €150/200 million
- Stake: Prefers majority stakes but also takes minority positions
- Board Representation: Seeks active involvement through board seats
- Revenue Range: Targets businesses in the lower middle market, typically between $30 million and $300 million in revenue
Sector Focus: While sector-agnostic, Eurazeo prefers investing in smart cities, services, leisure and mobility, real estate, fintech, distribution, industry, luxury, consumer goods, business services, and health. Eurazeo also invests in tech companies within the smart cities and fintech sectors.
Key Offices: Headquartered in Paris, France, with additional offices in North America, Asia, Europe, and South America
6) Elvaston Capital Management
Overview: Elvaston Capital Management is a private equity firm specializing in management buy-outs, management buy-ins, industry consolidation, restructuring, special situations, and growth capital investments. The firm typically engages in 3-5 add-on acquisitions per investment.
Geographic Focus: Primarily invests in Austria, Germany, and Switzerland.
Investment Criteria:
- Equity Ticket: $10 to $50 million in equity per transactions
- Revenue: Targets companies with annual revenue between €10 million and €100 million
- Stake: Prefers majority and minority stakes in its portfolio companies
- Sector Focus: Primarily invests in the technology sector, specifically enterprise software. Elvaston Capital Management has a strong focus on tech companies, particularly within the enterprise software sector
Key Offices: Headquartered in Berlin, Germany, with an additional office in London, United Kingdom
7) Verdane
Overview: Verdane is a private investment firm specializing in direct investments and secondary direct investments, focusing on supporting and growing businesses. The firm engages in buyouts, growth capital, and investments in other funds. It targets growth, seed/start-ups, early venture, mid-venture, late venture, emerging growth, spin-offs, and turnarounds in middle market, mature smaller stage, and medium-sized companies.
Geographic Focus: Primarily invests in the Nordic region (Sweden, Denmark, Norway, Finland) and prefers Central and Northern Europe.
Investment Criteria:
- Equity Ticket: Typically €1 million to €50 million, but can invest above €150 million
- Revenue: Targets companies with revenues between SEK 50 million and SEK 500 million
- Stake: Prefers minority stakes but also takes majority stakes, often seeking board representation and control investments
Sector Focus: Invests in IT, energy technology, resource efficiency, financial services, internet retail, fintech, consumer internet, ICT, e-commerce, telecommunications services, media, technology hardware, advanced industrial technology, oil and gas, biotechnology, and enterprise software. Verdane specifically targets tech companies within the IT and e-commerce sectors
Key Offices: Headquartered in Oslo, Norway, with additional offices in Europe and North America
8) Providence Equity Partners
Overview: Providence Equity Partners is a private equity firm specializing in lower middle market, later stage, growth capital, recapitalization of family-owned businesses, industry consolidation, large leveraged buyouts, distressed assets, and take-private investments.
Geographic Focus: Invests globally, including Africa/Middle East, Europe, North America, South America, Western Europe, and Asia/Pacific, with a focus on China.
Investment Criteria:
- Equity Ticket: Typically invests between $5 million and $800 million
- Enterprise Value: Targets companies with enterprise values under $1500 million
- Stake: Prefers to lead investments and usually takes a board seat, acquiring either minority or majority stakes
Sector Focus: Invests in industrials, transportation, consumer services, retailing, information technology, media, entertainment, communications, education, information industries, software and services, public securities, telecommunication, financial sectors, digital media, technology-enabled services, information, and education technology companies. Providence Equity Partners also focuses on tech companies within the information technology and media sectors
Key Offices: Headquartered in Providence, Rhode Island, with additional offices in Atlanta, Georgia; Boston, Massachusetts; London, United Kingdom; and New York
9) LDC
Overview: LDC (Lloyds) Limited is a private equity and venture capital firm specializing in growth capital, management buy-outs, institutional buy-outs, development buyouts, acquisition financings, pre-flotation funding, and expansion capital for SMEs and mid-sized businesses. The firm invests directly and through funds in unquoted middle-market companies.
Geographic Focus: Primarily invests in the United Kingdom (including London, South West, Wales, Northwest, Midlands, Scotland, South, Yorkshire, and North East) and Asia (with a focus on China).
Investment Criteria:
- Equity Ticket: Typically invests between £10 million and £100 million
- Deal Sizes: Deals range from £5 million to £250 million
- Revenue: Targets companies with turnover of at least £5 million and profits before tax and interest exceeding £1 million
- Enterprise Value: Typically invests in companies with enterprise values between €12 million and €300 million
- Stake: Prefers companies with at least a two-year profit history, making both minority and majority investments
Sector Focus: Invests in a wide range of sectors, including cleantech and renewables, energy efficiency, transport, water and waste, air and environmental, materials, agriculture, recycling and manufacturing; construction and property; financial services, business services, data and information services; healthcare, medical equipment, pharmaceuticals; industrials, aerospace, power generation, oil and gas; retail and consumer; TMT sector; support services; telecommunication; media; technology; travel and leisure; food and beverage; software; and specialist engineering. LDC also targets tech companies within the software and specialist engineering sectors
Key Offices: Headquartered in London, United Kingdom, with additional offices in Aberdeen, Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Manchester, Newcastle upon Tyne, Nottingham, and Reading
10) Waterland Private Equity Investments
Overview: Waterland Private Equity is a private equity firm specializing in buildups, growth financing, expansion capital, acquisitions, buyouts, buyins, divestitures, shareholder loans, buy and build, add-on acquisitions, middle market, public to private, replacement, restructuring, and privatization investments.
Investment Focus: The firm targets medium-sized companies across various sectors, including outsourcing and efficiency, computer and consumer-related, consumer products, industrial products, media, health services, transportation, retail, real estate, consumer services, energy and environment, aging populations, sustainability, travel, luxury, materials, trade and services, information and communications technology, business and industrial services, financial services, life sciences, and leisure.
Geographic Focus: Waterland primarily invests in Northern Europe, focusing on companies with decision centers in the Benelux region (Belgium, the Netherlands, and Luxembourg), Germany, Austria, France, Switzerland, the UK, Ireland, Scandinavia (Denmark, Sweden, Norway, Finland), and Poland.
Investment Criteria:
- Equity Ticket: €2 million to €25 million
- Company Revenue: €10 million to €200 million
- Stake: Primarily seeks majority stakes but may also consider minority investments
Key Offices: Headquartered in Bussum, Netherlands, with additional offices in Europe, including London and Manchester, United Kingdom
Source: Company websites; S&P Capital IQ
Have you received an offer for your business from a private equity firm?
Congratulations! Receiving a offer is a testament to your hard work and dedication. Enjoy the moment, but don’t rush into a decision—remember, the first offer is rarely the best one.
Having an advisor by your side can help streamline the transaction process and help you achieve your needs. Advisors bring expertise, strategic guidance, and extensive networks to ensure you get the best deal. Accepting an offer without professional support can leave you at a disadvantage, as having only one bidder limits your negotiating power and the ability to compare offers. Advisors also help identify potential pitfalls and navigate the complexities of due diligence and negotiations with sophisticated buyers, protecting your interests throughout the process. We ensure your sale aligns with your long-term goals, considering management transitions, your employees, and ownership structures.
By partnering with an advisor, you can stay focused on running your business with peace of mind, knowing you have an expert in your corner to bounce ideas off of and strategize with. We only win when you win.
About Aventis Advisors
Aventis Advisors is an M&A advisor focusing on technology and growth companies. We believe the world would be better off with fewer (but better quality) M&A deals done at the right moment for the company and its owners. Our goal is to provide honest, insight-driven advice, clearly laying out all the options for our clients – including the one to keep the status quo.
Get in touch with us to discuss how much your business could be worth and how to maximize the valuation.
