Nordic Capital buys majority stake in VC-backed Duco

Founder Christian Nentwich will remain a shareholder in the company and will continue in his role as CEO.

Nordic Capital said in a statement that it intends to leverage its experience in the technology and payments sectors, supporting the company with international expansion, product development and employee growth.

Nordic Capital is deploying equity via Nordic Capital X, which held a final close in October 2020 on EUR 6.1bn. The fund invests in large and medium-sized companies in the business and industrial services, technology, financial services and healthcare sectors, targeting businesses based in Northern Europe.

The GP recently raised its first fund focusing on the mid-market in July 2021, as reported. 

The acquisitoin of Duco is Nordic Capital’s second investment in the UK in 2021, following its USD 846m acquisition of London-headquartered Advanz Pharma. The deal completed in June 2021, following Nordic Capital’s announcement of its takeover bid in January 2021.

The GP's other current UK-based portfolio company is diagnostics laboratory Binding Site. Nordic Capital acquired the company via its seventh flagship fund in 2011, transferring it in to a continuation vehicle along with a portoflio of eight other assets in a GP-led secondaries deal in 2018.

Previous funding
In January 2018, Eight Roads Ventures and Insight Partners led a USD 28m funding round for Duco, investing alongside corporate venture firm NEX Opportunities. NEX was acquired by CME Group in November 2018 in a deal that reportedly valued the company at USD 5.5bn, with the portfolios of NEX Opportunities and CME Ventures combining.

The USD 28m funding was intended to support Duco’s international expansion strategy. The company had a USD 100m valuation at the time of its last funding round, according to press reports.

Company
Duco is a cloud-based software for financial services, insurance and fintech companies that allows them to manage their data via an automated platform. Its clients include Société Générale and Rabobank, according to its website. The company was founded in 2010 and is headquartered in London, with 140 employees across sites in the UK, the US, Singapore and Poland.

According to its latest publicly available accounts, Duco grew its employee headcount in 2020 by 43% year on year. The company posted revenues of GBP 8.7m in 2020, versus GBP 6.4m in 2019. Of its 2020 turnover, 96% was generated from recurring revenues.

People
Duco – Christian Nentwich (founder, CEO).
Nordic Capital – Emil Anderson (principal).
Insight Partners – Peter Sobiloff (managing director); Jeff Horing (managing director); Jared Rosen (vice president).

Advisers
Equity – Dechert (legal); Oliver Wyman (commercial due diligence); EY (IT due diligence); PwC (financial due diligence); Deutsche Bank (M&A).
Vendor – Arma Partners (corporate finance).

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