Verdane reaps 4x in USD 360m Brightpearl exit

Harriet Matthews
06 January 2022

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Verdane has sold its stake in UK-based Brightpearl, a retail digital operations platform, to Sage Group in a deal that values the company at around USD 360m, with Verdane scoring returns of 4x money on invested capital.

The deal will see SEK 490m (EUR 47.5m) in proceeds returned to Verdane Capital X, and is Verdane's first core company realisation from the vehicle.

Verdane X held a final close in January 2019 on SEK 6bn (EUR 593m). It targets technology-enabled companies in northern Europe with revenues of SEK 50m-500m (EUR 4.8m-48.4m), acquiring majority and minority stakes either by direct investments or through portfolio acquisitions.

Verdane declined to comment.

Further exiting shareholders include Cipio Partners and Notion Capital, as confirmed in statements issued by both VCs in December 2021.

Prior to the exit, Sage owned a 17% stake in the company. Sage said in a statement issued in December 2021 that the consideration for the remaining stake is USD 299m (GBP 225m), which will be funded via Sage's existing cash and available liquidity.

Verdane acquired a stake in Brightpearl in February 2020 via a portfolio deal that saw the GP take minority stakes in eight companies from Eden Ventures. The deal was Verdane's first portfolio transaction in the UK. The GP subsequently bought a further stake in the company via its USD 33m funding round in December 2020.

During Verdane's investment period, the company's annual recurring revenues grew from around USD 12m to USD 30m, with a compound annual growth rate of around 58%, a source close to the situation told Unquote. The company is also close to breaking even on its EBITDA, the source added.

In addition to organic growth, Brightpearl has also pursued M&A opportunities, including its acquisition of Inventory Planner in September 2021.

Previous funding
Brightpearl raised USD 1.5m from angel investors in a seed round in 2010.

Notion Capital and Eden Ventures participated in a USD 5m Series A round for Brightpearl in 2011. The same investors also backed a USD 8m Series B round in 2013.

MMC Ventures led a USD 10m funding round for Brightpearl in April 2014, joined by existing investors Eden Ventures and Notion Capital.

In January 2016, MMC, Eden and Notion provided a USD 11m funding round for Brightpearl. Silicon Valley Bank and Columbia Lake Partners provided debt to the funding, according to Unquote Data.

In December 2020, Brightpearl raised a USD 33m funding round led by Sage Group, which provided USD 23m of the round's total. Cipio Partners, Notion Capital and Verdane also participated, providing the remaining USD 10m.

Company
Brightpearl is a cloud-based retail digital operations platform that provides software for functions including inventory management and enterprise resource planning. The company is headquartered in Bristol and has an additional office in Austin, Texas.

Brightpearl was expected to generate revenues of USD 27m in 2021, an increase of around 50% on the previous year, according to a statement from Sage Group.

People
Verdane – Emanuel Johnsson (partner).
Brightpearl – Derek O'Carroll (CEO).
Sage Group – Steve Hare (CEO).
Notion Capital – Chris Tottman (general partner).