December 5, 2023

PSG Equity closes second Europe-focused fund at over €2.6B; Know more

PSG Equity, a growth equity firm helping software companies navigate and capitalise on transformational growth, has announced the final close of PSG Europe II, the firm’s second Europe-focused fund, with more than €2.6B in commitments.

PSG Europe II (PSGE II), a growth equity fund dedicated to European software companies, surpassed PSG’s initial target.

The funding attracted support from new and existing global investors, including state pension funds and sovereign wealth funds. This fund outstrips its predecessor, PSG Europe I, which closed in 2021 with €1.3B in commitments.

Peter Wilde, Chairman of PSG says, “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.”

Digitalisation of the European economy

According to a statement from PSG Equity, Europe is the world’s second-largest IT and software market, following North America. The software sector in Europe is expanding, fueled by innovations like generative AI, and is projected to reach $309B (approximately €289.39B) by 2026.

Europe’s market and rising investor interest are boosting funding for European tech companies, closing the gap with the US. Additionally, the increased digitisation of business processes is creating a market for B2B software businesses across various sectors.

PSG sees opportunities in the fragmented European software sector, with high-quality providers focusing on specific strategies or countries. Leveraging its local expertise, relationships, and operational support, PSG aims to nurture organic and acquisition-based growth for B2B software businesses across Europe.

Mark Hastings, CEO of PSG says, “With PSGE II, we will be well-positioned to further capitalise on the growing investment opportunities generated by the ongoing digitalisation 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,” adds Hastings.

PSG’s growth in Europe

PSG boasts one of the largest global teams dedicated to investing in growth-stage B2B software companies, operating across Europe, North America, and Israel. The firm’s success stems from combining a global infrastructure with local market expertise.

PSG focuses on scaling single-country, single-product software firms into multi-country, multi-product pan-European champions through organic and inorganic growth. Leveraging their US origins and resources, the firm can be a strong partner for market expansion in North America.

Dany Rammal, MD and Head of Europe at PSG says, “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, verticalised ERP and CRM and workforce management, among others,” adds Rammal.

Since its establishment in 2019, PSG’s European team, comprising 57 professionals, is based in London with offices in Paris and Madrid.

The firm has made 22 platform investments in Europe, acquiring companies like Hostaway, Billwerk+, and Signaturit. They’ve also facilitated over 60 add-on acquisitions, operating in 15 European countries.

Brief about PSG Equity

PSG Equity is a growth equity firm specialising in software and technology-enabled services companies. It has backed over 130 companies and facilitated more than 470 add-on acquisitions.

Founded in 2014, the firm operates globally from offices in Boston, Kansas City, London, Paris, Madrid, and Tel Aviv, collaborating with management teams to foster growth and capitalise on strategic opportunities.

Leave a Reply

Your email address will not be published. Required fields are marked *