Commitments to second fund significantly exceed size of PSG Europe I, following strong demand from both new and existing limited partners
Ongoing digitalization of the economy combined with fragmented nature of the European market continues to present significant investment opportunities in the software sector
PSG has one of the largest investment teams focused solely on investing in growth stage B2B software businesses; it has backed more than 130 companies and facilitated over 470 add-on acquisitions across Europe, North America and Israel
07/11/2023 — LONDON & BOSTON — (BUSINESS WIRE)
PSG Equity (“PSG”), a leading growth equity firm partnering with software and technology-enabled services companies in Europe, North America and Israel to help accelerate their growth, today announced the final close of PSG Europe II (“PSGE II”), the firm’s second Europe-focused fund, with more than €2.6 billion in commitments.
PSGE II, one of the largest growth equity funds raised to invest exclusively in European software companies, exceeded PSG’s initial target. The successful fundraise reflects the strong support received from both new and existing investors globally including state pension funds, sovereign wealth funds, family offices and high net worth individuals. PSGE II significantly exceeds the size of its predecessor, PSG Europe I, which held its final close in January 2021 with more than €1.3 billion in commitments.
Peter Wilde, Chairman of PSG, said, “We are grateful for the support that our second European fund has received from both new and existing PSG limited partners. The strong demand from a high-caliber and diversified group of investors globally demonstrates the attractiveness of Europe’s software market as well as the strength of the PSG platform and our investment approach, both in Europe and North America. The successful closing of our second European fund cements our position as one of Europe’s leading growth equity investors in the software sector.”
Market Opportunity: Digitalization of the European Economy
Europe represents the second largest IT and software market globally after North America. The software segment continues to be one of the fastest growing in the European IT market, driven by innovations such as generative AI, and is expected to reach $309 billion in size by 2026. Europe’s attractive underlying market and increasing investor focus are driving a catch-up in funding for European technology companies compared with the U.S. Furthermore, across all sectors, business processes continue to be digitized at an increasing rate thereby creating a growing market for B2B software businesses.
PSG sees the European software sector as highly fragmented with many high-quality point solution providers, often focused on either a single strategy or a single country. This market dynamic presents significant investment and growth opportunities for firms like PSG, which possess local expertise and relationships across Europe to support deal sourcing, extensive operational support capabilities and a longstanding global track record of growing B2B software businesses both organically and inorganically.
Mark Hastings, Chief Executive Officer of PSG, commented, “With PSGE II, we will be well-positioned to further capitalize on the growing investment opportunities generated by the ongoing digitalization of the European economy. We see substantial investment opportunities as companies of all sizes across all economic sectors are increasingly adopting digitization and automation tools to improve their customer service, increase productivity and secure their operations.”
PSG: A Leading Global Software Investor
With almost 200 professionals across Europe, North America and Israel, PSG has one of the largest global teams focused solely on investing in growth stage B2B software companies and is one of the sector’s most active investors in Europe. The firm’s success has been in part driven by its ability to leverage its global sourcing, operations and business functions infrastructure while bringing a local presence in and knowledge of the markets in which it invests.
PSG’s investment strategy focuses on scaling single-country, single-product software companies through organic and inorganic growth into multi-country, multi-product pan-European champions across multiple markets, supporting its portfolio companies’ global growth ambitions. Given its origins, resources and track record in the U.S., PSG can be a strong supportive partner to enable market expansion in North America.
Dany Rammal, Managing Director and Head of Europe at PSG, added, “The tremendous growth we have experienced in Europe since our inception is a testament to the success of our investment strategy and to the quality and depth of our growing team. Our cross-border M&A expertise, local knowledge and relationships, and the operational support we can provide to management teams, make us a partner of choice for ambitious and innovative founders looking to create pan-European software champions and expand internationally, including in North America. We will leverage our global software expertise to accelerate investment in innovative businesses that are using cutting edge technologies like generative AI, to drive growth and automation across cybersecurity, fintech, payments, verticalized ERP and CRM and workforce management, among others.”
PSG’s European team, which was established in 2019 and consists of 57 professionals, is headquartered in London with additional offices in Paris and Madrid. To date, PSG has made 22 platform investments in Europe with the acquisitions of Hostaway, Artur’in, Billwerk+, Hornetsecurity, Imaweb, Mapal Group, Nalanda Global, N2F, Nomentia, Powens, Rapid Data, Rodeo, Sellsy, Sesame, Signaturit, Skeepers, Sport Alliance, Tellent, Visualfabriq, Whoz, Zenchef and ZeroNorth, and facilitated over 60 add-on acquisitions with operations in 15 European countries.
About PSG Equity
PSG Equity (“PSG”) is a growth equity firm that partners with software and technology-enabled services companies to help them navigate transformational growth, capitalize on strategic opportunities and build strong teams. Having backed more than 130 companies and facilitated over 470 add-on acquisitions, PSG brings extensive investment experience, deep expertise in software and technology, and a firm commitment to collaborating with management teams. Founded in 2014, PSG operates out of offices in Boston, Kansas City, London, Paris, Madrid and Tel Aviv. To learn more about PSG, visit www.psgequity.com.