Graphite Capital acquires Wonderbly

According to a statement, Wonderbly is beginning to shift from a solely consumer-focused business to providing personalised products for corporate clients via their own websites, including Universal and Warner Bros.

Graphite intends to support the business as it develops into a broader digital media and technology company, continuing to work with Wonderbly's management team.

Santander provided debt to back the acquisition of Wonderbly.

Graphite acquired shares in the company from its previous VC backers.

The deal is the seventh platform investment from Graphite Capital Partners IX. The fund held a final close in July 2018 on GBP 470m and intends to make 8-12 platform deals in total, targeting UK-based mid-market companies with enterprise values of GBP 30m-175m.

Prior to the acquisition of Wonderbly, the fund's most recent investment was Higher Ed International; the GP took a minority stake in the online education platform in March 2021.

The deal also follows the announcement of Graphite's largest ever exit by enterprise value earlier in July 2021. The GP is to sell automotive repair and refinishing products producer U-Pol to US trade buyer Axalta Coating Systems for GBP 428m, netting returns of 4.5x money, as reported.

Previous funding
Following an appearance on BBC TV programme Dragon's Den in 2014, Wonderbly (then known as Lost My Name) received an investment of GBP 100,000 from Piers Linney in exchange for 4% of the company's equity, marking the highest valuation in the history of the programme to date.

Forward Partners invested in Wonderbly later that year.

In June 2015, Google Ventures led a USD 9m round for the company, joined by Greycroft Partners, the Chernin Group, Allen & Company and former SunGard president and CEO Cris Conde.

Project A Ventures backed a EUR 4m series-A extension in June 2016.

Wonderbly raised a further USD 8.5m in August 2017, following which the company rebranded from Lost My Name to Wonderbly. Publisher Ravensburger led the round, which also saw participation from Project A Ventures, Google Ventures, Greycroft Partners, the Chernin Group and Allen & Company. Silicon Valley Bank provided a venture debt facility.

Company
Wonderbly was founded in 2012 by Asi Sharabi, David Cadji-Newby, Tal Oron and Pedro Serapicos, and was known as Lost My Name until 2017. Wonderbly produces personalised books for children, offering 44 titles in seven languages and selling its products in more than 150 countries via its online platform. The company is headquartered in London.

According to its latest accounts, for the year ending 31 May 2020, the company posted sales of GBP 26.1m and operating profit of GBP 2.9m, versus sales of GBP 21.2m and operating profit of GBP 1m in the 13 months to 31 May 2019. New product launches made up 31% of its 2020 revenues, with 25% of the total from non-English language products and 39% from the US. The company currently posts revenues of more than GBP 30m, following revenue growth of 20% per annum for the past three years, according to a statement.

People
Graphite Capital – Omar Kayat (senior partner); Lara Markham (investment director); Edgar Borg Rodriguez (investment executive).
Wonderbly – Asi Sharabi (chief executive).

Advisers
Equity – JEGI Clarity (M&A, debt advisory).
Vendor – BDO Corporate Finance (corporate finance).

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• Topics
• Buyouts
• Consumer
• UK / Ireland
• United Kingdom
• Graphite Capital
• Project A Ventures