GRO Capital acquires majority stake in Netigate

Ero Partsakoulaki
16 August 2022

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GRO Capital is set to become a majority investor in Stockholm-headquartered customer and employee feedback platform Netigate, with the aim of accelerating its international growth and the development of its product.

The Copenhagen-based GP invested in Netigate via its third fund, GRO Fund III, GRO partner Lars Lunde told Unquote. The fund held a final close on EUR 600m in March 2022 and invests in B2B mature, growing software companies in the Nordic, Benelux and DACH regions, according to Unquote Data.

Unquote sister publication Mergermarket first reported in March 2022 that Netigate was close to launching a sale process led by Houlihan Lokey. The report cited CEO Mikkel Drucker as saying that the company expected to grow by 25% in 2022, hitting SEK 170m (EUR 16.46m) in annual recurring revenue (ARR). Netigate recorded SEK 102.9m (EUR 9.7m) FY20 revenue and SEK 681,000 (EUR 64,640) EBIT, according to its latest financial statement.

The company was expected to be valued at an 8-10x revenue multiple, according to Mergermarket, a figure that is "too high", according to Lunde.

GRO's strategic investment in the company will support its management and a couple of private investors in proving commercial traction with new initiatives, he said.

The GP's ability to support the scaling of sales, marketing, and product innovation was central to GRO winning the deal, said Lunde. The firm will aim to scale Netigate's sales internationally by bringing new product features to market and via M&A, he said.

Netigate hopes to become Europe's leading experience platform in the mid-market, leveraging the increasing competition for both talent and customers, as well as capturing and acting on feedback across the entire employee and customer journeys, according to a press release.

Company
Founded in 2005, Netigate provides a cloud-based management platform that allows companies to collect, analyse and take action on insights and feedback gathered from customers and employees. The company has more than 1,500 global customers. It is headquartered in Stockholm and has more than 150 employees across four more offices in Oslo, Warszaw, Berlin and Frankfurt.

People
Netigate − Mikkel Drucker (CEO); Tom Nyman (chairman).
GRO Capital − Lars Lunde (partner).

Advisers
Equity − Roschier (legal); KPMG (corporate finance); McKinsey (commercial due diligence).
Vendor (Netigate) − Houlihan Lokey (corporate finance).