Copilot Capital, a new private equity firm focused on backing the next generation of European software champions, has launched a new £160 million fund.
The fund was co-founded and seeded by an investment division of The Friedkin Group.
Recognising a gap for investing in lower mid-market software across Europe, Copilot Capital plans to back companies generating €5-€15m in annual recurring revenue and empower founders to lead their businesses into the next growth phase.
Amidst a challenging fundraising environment, there has been a shortfall in capital directed to the lower mid-market, even though there are many sustainable growth businesses in this segment. Successful private equity funds have grown AUM and shifted their focus to bigger deals, while VC firms have continued to reserve their capital for high growth, ‘power law’ outcomes.
Copilot Capital aims to become the investment firm of choice for software businesses looking to scale, taking controlling stakes in maturing European software companies and using its deep operational expertise to help founders drive further growth and profitability, with a specific focus on go-to-market strategy, internationalisation, acquisitions and data & AI.
Copilot Capital was co-founded by John Messer and Danny Friedkin. Messer was previously at Tenzing, where he focused on software buyouts including leading the fund’s record return of 9.6x for CitNOW.
Friedkin is principal of The Friedkin Group International (TFGI), a global investment firm focused on creating and seeding new private equity firms. TFGI is part of The Friedkin Group, a privately held consortium of businesses and investments that is best known for founding and scaling Gulf States Toyota and owning iconic organisations like the Italian football team AS Roma.
Friedkin is supported at TFGI by Charlie Daniel, who is the third co-founder of Copilot Capital.
“John’s focus on identifying overlooked potential aligns perfectly with The Friedkin Group’s approach,” said Friedkin. “Our success has stemmed from making unique contributions to a founders’ growth journey, and finding value where others haven’t. We’ve backed many exceptional founders and management teams across a diverse range of industries. John and the Copilot Capital crew are the next chapter in that adventure.”
Messer added: “There are 60,000 SaaS companies across Europe. Many of these maturing businesses don’t fit the profile of a typical VC or buyout fund and fall through the cracks, despite their obvious potential.
“Our goal is to identify businesses with market-leading products and proven revenue models and equip them with the capital and expertise to scale into software champions.”
In tandem with the fund’s launch, Copilot Capital announced the fund’s first investment into Danish-based Relesys, an all-in-one employee app for frontline workers in the retail industry.