Flex Capital buys majority stake in Egoditor

The GP aims to open new marketing channels for the company and develop the firm's product offering, according to a statement.

The company's management team will remain in their existing roles.

Asked how the deal came about, Mark Miller, managing partner at Carlsquare, Egoditor's corporate finance adviser, told Unquote: "We spend a lot of time looking for hidden champions in the market. Egoditor has grown consistently, and the company is international – the US is a big market for them. The company is doing well, it's profitable, but the founders decided that it would be good to bring an entrepreneurial partner on board, someone who has experience in building up businesses."

Miller explained that the company drew interest from a number of potential investors: "We approached different parties and there was a high level of interest. But we did not look too broadly. The founders wanted to stay on board, so we focused on financial investors."

Egoditor is Flex Capital's first investment, as well as the first investment from the GP's debut fund, which closed in December 2019 on approximately €120m. The vehicle focuses on Germany-based Mittelstand software-as-a-service businesses that are facing structural limits to their growth; it invests €5-25m for majority stakes in companies with revenues of €5-30m. The vehicle will also deploy additional equity for add-ons and other growth projects during the investment period.

The fund is backed by the six entrepreneurs who founded the firm: Christoph Jost, Peter Waleczek, Felix Haas, Jan Becker, Robert Wuttke and Andreas Etten.

Flex Capital was not available for comment at the time of publication.

Company
Founded in 2009 by Nils Drescher and Nils Engelking, Egoditor provides software that allows users to create their own QR codes for marketing purposes. The company allows users to create a limited number of types of QR code for free, but offers additional services with the Pro and Advanced versions of its software package, including tracking and analytics tools, and customisation services. The codes can be used for products ranging from clothing to tickets.

Of the company's revenues, 90% is generated beyond Germany – 30% from the IS, its largest market. The company has 30 staff and is headquartered in Bielefeld.

People
Flex Capital – Christoph Jost, Peter Waleczek (managing partners).
Egoditor – Nils Drescher, Nils Engelking (founders).

Advisers
Company – Carlsquare, Mark Miller, Sebastian Fischer (corporate finance); Musfeldt, Christian Musfeldt (legal).
Equity – CMS (legal).

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