Who says there isn’t a lot of money in software to help people? Private equity company Apax Fund announced this morning that it is combining three social impact companies to create some sort of platform in a deal valued at $ 2 billion.
To build this behemoth of social good, Apax went out and bought Every action Insight partners and Social solutions from Vista Equity Partners, two companies we often see involved in SaaS transactions.
The plan is to combine the two companies with E-grants, a company that Apax acquired in June. With EveryAction, businesses have a customer engagement platform focused on the needs of nonprofits. Instead of trying to get people to buy more things, the goal would be to increase engagement with donors. Social Solutions is a tool for collecting data about an organization’s activities and leveraging that data to coordinate service delivery and measure how well you are doing with your service goals.
Finally, CyberGrants is a corporate responsibility platform designed to help companies create programs that allow employees to volunteer in the community and âmaximize the impact of corporate sponsorshipâ.
Erin Mulligan Nelson, CEO of Social Solutions, sees the combination of the three companies as a way to accelerate their individual efforts as businesses. âJoining forces will enable human service agencies in the public and not-for-profit sectors to take full advantage of digital transformation opportunities. Our expanded offerings and product innovation opportunities will create real added value for our customers, improve outcomes for the people they serve and help them accelerate sustainable social change, âshe said in a statement. .
While the three companies have a common theme of using software to help customers operate more efficiently in a context of social impact, bringing three disparate companies together on a single platform could prove difficult, even if the new company will surely have numbers in its favor.
Apax reports that the combined companies will generate $ 200 million in revenue, involving 650,000 nonprofits and half of the Fortune 500, while coordinating a staggering 38 million donors and volunteers. It is certainly the scale.
Private equity firms tend to seek deals in undervalued companies that they can create and find missing value, and if that involves software meant to help charitable efforts, so be it. The fact that Apax bought these companies from other private equity firms suggests that this is an area these companies are monitoring.
Of the three companies involved, only Social Solutions raised venture capital, according to Crunchbase data, raising $ 70 million, including a $ 59 million investment from former Microsoft CEO Steve Ballmer in 2018. As c ‘is often the case with PE agreements, these three companies are a bit older, with EveryAction founded in 1997, CyberGrants in 1999 and Social Solutions in 2006. Perhaps they could use modernization or benefit from investments. additional from a company like Apax, which hopes that by combining these three companies it can be a force in this space.
Sometimes the bigger the better. Sometimes this is not the case. Time will tell if Apax can do it. The deal will be subject to normal closing conditions and is expected to close later in the quarter.