HPE forms €160m continuation fund for fintech platform PPro

Harriet Matthews
11 June 2021

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HPE Growth has formed a тЌ160m single-asset continuation fund for PPro, an international electronic payments platform that it has held in its portfolio since 2014.

The deal is expected to close in the summer of 2021.

Cebile Capital acted as sole financial adviser to HPE. Sunaina Sinha Haldea, a managing partner at Cebile, told Unquote that the deal took around five to six months to complete, which she said is a typical timescale for a GP-led secondary deal. "This deal was a classic example of why such deals exist: you have a 'jewel in the crown' investment that is managed by a top quality GP. You need both of these elements for it to be successful."

Asked about the process behind the deal, Sinha Haldea said: "We structured the deal with HPE and then took it to market to see which investor would be interested – we undertook a full and fair price discovery, inviting eligible investors to do their due diligence and put their best foot forward based on this."

Coller Capital and Adams Street Partners co-led the secondary transaction with support from Pomona Capital and W Capital. However, Sinha Haldea added that the deal was significantly oversubscribed, noting that the transaction could have been done twice-over given the level of interest.

Proskauer and Stibbe provided legal advice for HPE, while Akin Gump acted as the legal counsel for Coller and Adams Street.

HPE first invested in PPro via its debut fund, HPE Fund I. LPs in this fund were given the option to roll their stakes in PPro into the new vehicle or to realise their stakes as part of the secondary deal.

The rationale behind retaining its stake in PPro for a longer holding period is to realise further growth in the company, while adding additional LPs through the new vehicle, HPE said in a statement.

Since HPE's initial investment in the company's 2014 series-A round, PPro has raised several growth rounds. For instance, in December 2018, Northleaf Capital Partners backed the company.

Sprints Capital led a $50m round for PPro in August 2020, with participation from existing investors Citi Ventures and HPE.

In January 2021, Eurazeo, Wellington Management and Sprints Capital backed a $180m round for PPro. The company was valued at $1bn at the time of the round. JP Morgan and Eldridge Industries led a $90m extension for PPro in March 2021, bringing the total capital raised in the round to $270m.

PPro was founded in 2006 and is headquartered in London. The company provides an electronic payments platform to allows local merchants to make international transactions and facilitate a smooth payment experience for their customers.

Cebile's Sinha Haldea added that the GP-led secondaries market is increasingly seeing GPs undergoing such deals when invested in growth companies such as PPro. "We are seeing a democratisation of GP-led deals in the mid-market and growth-capital space," she said. "These were previously done by large-cap names, but more mid-market and growth capital GPs are now seeing they can do it, too, and do it successfully. We have barely scratched the surface, but we are seeing increased awareness of what these deals can do for GPs and fund stakeholders.

"The trend line is very much towards continuation vehicles, specifically for single-assets, so that GPs can hold for longer," Sinha Haldea said, noting that Cebile is seeing both traditional buyout assets and growth capital assets in the market for these deals.