EQT Growth in active deployment with EUR 100m IntegrityNext deal

Rachel Lewis
24 March 2023

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EQT Growth is "actively looking to invest" in its core subsectors following the fund's EUR 100m investment into ESG compliance software company IntegrityNext, Nils Petter Nygaard, a director within the sponsor's growth team, told Unquote.

The fund has "a lot of capital available to deploy" following the final close of its debut growth fund last year, he said.

EQT held a final close for EQT Growth Fund in September 2022 on its EUR 2.2bn hard cap. The vehicle deploys tickets of EUR 50m-EUR 200m.

The fund will double down on its four key tech sub-sectors: enterprise, con/prosumer, health, and climate. "Being clear in these certain sub-sectors is attractive," he added. "There are clear trends irrespective of the current macro environment."

The sponsor has become IntegrityNext's first institutional investor following a sale process led by Raymond James, valuing the company based on an annual recurring revenue (ARR) of around EUR 20m, as reported by Unquote's sister publication Mergermarket.

The sponsor met with the team last year, having done a lot of wider preparation work around supply chain sustainability, seeing it as a strong investment as a workflow tool but also its ability to leverage the data of its customers, Nygaard said.

IntegrityNext is expected to benefit from a proliferation of sustainability and ESG regulations, such as the EU's recent Green Deal and Corporate Sustainability Reporting Directive, and the German Supply Chain Due Diligence Act, he said.

Organic growth will also be bolstered by increasing stakeholder pressure to ensure ESG compliance, he added.

For value-add, EQT will bring its dedicated digital team to help the company develop its tech, marketing and go-to-market, while it also has close to 20 employees advising on sustainability for deals and within the portfolio, Nygaard said.

The growth story for IntegrityNext going forward will focus on the organic, as is common across EQT Growth's investments, he added.

Company
Munich-based IntegrityNext helps businesses to meet regulatory ESG requirements, manage ESG risks and improve supply chain sustainability. Its cloud-based software platform is used by more than 200 customers, including Siemens Gamesa, Infineon, SwissRe, Kion and Hilti. To date, the company monitors almost one million suppliers in more than 190 countries.

Advisors
Equity - Raymond James (M&A).

People
EQT Growth - Dominik Stein (partner), Nils Petter Nygaard (director).
IntegrityNext - Martin Berr-Sorokin (CEO and co-founder).