3i, Volpi invest in Digital Barriers

Wahida Ahmed
17 June 2022

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Listed GP 3i has invested in UK-based Digital Barriers, a provider of video compression technology, alongside existing investor Volpi Capital.

According to Unquote Data, Volpi acquired the business through Volpi Capital I in October 2017 in a deal that gave the company an equity valuation of up to GBP 27.5m. Volpi Capital I held a final close in April 2018 on EUR 185m.

Following 3i's investment in the company, Volpi will retain a minority stake in the business alongside management, while 3i will hold the majority, according to a spokesperson for 3i.

With the support of 3i, Digital Barriers will aim to accelerate its international expansion, invest further in its technology, and pursue targeted acquisitions, according to a press release.

Under Volpi's ownership, Digital Barriers invested in the launch of cloud-native, hardware-agnostic Video Surveillance as a service solution. In addition, the company introduced recurring revenues and scale by setting up an indirect channel partner network with companies, including Vodafone and Fujitsu. The company also moved from custom requests to a repeatable delivery system, which increased margins on its core offering, according to a press release.

3i invests in companies across Europe and North America with enterprise values in the range of EUR 100m-EUR 500m, according to its website. Recent investment activity includes the acquisition of Germany-based xSuite, an APIA specialist, and Belgium-based TCR, a renting and leasing provider of airport ground support equipment, both in June 2022, according to Unquote Data.

Volpi is deploying equity via Volpi Capital Fund II, which held a final close in January 2021 at USD 323m. Like its predecessor, the vehicle invests in technology-enabled, B2B companies in northern Europe. The firm typically invests EUR 25m-EUR 75m of equity in businesses with enterprise values of EUR 50-200m, according to Unquote Data.

Volpi declined to comment.

Company
Digital Barriers was established in 2009 through an IPO on the UK AIM and is headquartered in the UK, with offices in the US, Europe and Asia-Pacific. The company provides surveillance and security products to customers that work across private security, policing, national security and defence, among others.

According to public accounts, Digital Barrier generated revenues of GBP 22.3m in the year to 31st March 2021, versus GBP 18.6m in the year to 31st March 2020.

People
3i Group – David Stephens (head of UK private equity team).
Digital Barriers – Zak Doffman (CEO).
Volpi – Crevan O'Grady (partner).

Advisers
Equity (3i) – Deloitte (financial due diligence); Ropes & Gray (legal); Momenta (commercial due diligence); Ringstone (technical); Gallagher (insurance); Korn Ferry (management referencing).