Investor Appetite for Foreign Growth Stage Software Companies

The United States has been a vibrant market for software investors. Software companies of all stages from pre-revenue to growth stage to maturity have provided ample opportunity for investors to participate in the massive digital revolution of our era. And while there’s no danger in running out of U.S. companies to invest in, investors are finding it advantageous to look beyond the domestic market for even better opportunities abroad.

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Recently two well-known private equity firms, Accel-KKR and Advent International, announced software investments in Chile and New Zealand, respectively. Both firms found attractive niche solutions which are growing rapidly.

Accel-KKR invested in Lemontech, the Latin American leader in legal technology solutions. The company, founded in 2004 and headquartered in Santiago, Chile, sells into law firms looking for a solution to track and manage billable hours as well as for judicial case management. Its case tracking product currently monitors and manages over 1.5 million cases throughout LATAM. In aggregate, over 1,000 firms and 10,000 legal practitioners use Lemontech across 18 countries.

Meanwhile, Advent international acquired a majority stake in Transaction Services Group, which provides software and payment solutions to health club facilities in Australia, Europe and other major markets such as Japan and the U.S. Jeffrey Paduch, a Partner at Advent states, “TSG represents a unique platform at the nexus of business management software and payments, which is well positioned for future growth. We are excited to support TSG to drive product innovation and further expand its geographical footprint.”

Notably, Advent has been focused on global investing for some time. It has invested $3.8 billion in nine platform companies in payments and $3.8 billion in six companies in software worldwide. In addition to TSG, investments in the payments sector include Prisma, Clearent/Fieldedge, Concardis, Nexi, Nets, Worldpay, Vantiv and Monext while investments in the software sector include CCC Information Services,, P2 Energy Solutions, Skillsoft, Unit4 and KMD.

Accel-KKR is a bit newer to international markets but has in recent years honed in on opportunities in Europe as well as Latin America.