Posted on April 7, 2017 by staff

Tech investment competition ‘more intense than ever’


A leading private equity investor has said the competition to invest in the best tech companies is as fierce as he can remember.

Matthew Caffrey is a partner at mid-market private equity firm Livingbridge, which has a track record for investing in tech firms including Metronet and Exclaimer, the largest global provider of email signature software.

He told BusinessCloud the competition was creating “double digit multiples” and higher.

Livingbridge typically invest between £2m and £50m of equity and Caffrey says there is no shortage of investors looking for tech firms with a secure recurring revenue stream.

“It’s as competitive as I’ve known it,” he said.

“Certainly if you’re selling a technology business at the moment you’re not short of people to talk to.

“We’re seeing multiples north of 10x. For really great assets they’re stretching up towards 13x or 14x.

“If you a web-based business, potentially in social media or you have a business that is developing apps, then there’s always the hope from the entrepreneur that they may have a unicorn on their hands.

“I think for businesses that are more software-based, certainly managed services or connectivity-based, these entrepreneurs are looking for partners to work alongside their business.

“What we’re good at is working with these types of individuals.”

Caffrey, who has worked at Livingbridge for 12 years, had mixed views on the impact of Brexit.

“Brexit doesn’t feel like it’s causing an issue at the moment,” he said.

“I’ve no doubt that it will impact on the market depending on the type of exit we have from the EU. I think it’s a ‘watch this space’ question.

“Confidence still seems to be there. For the moment I think it’s business as usual.”