Baird Capital invests in Freemarket

Ero Partsakoulaki
24 May 2023

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Baird Capital, an affiliate private equity arm of US-headquartered investment bank RW Baird, has completed a growth capital investment in Freemarket, a London-headquartered fintech platform for regulated B2B cross-border payments and currency exchange.

The investment will support the company's growth and international expansion, as well as provide a partial cash-out to existing shareholders, according to a statement.

Baird will be investing in the business via Baird Capital Global Fund II. This is the seventh investment from the fund, Michael Holgate, partner with Baird Capital's global private equity team, told Unquote.

The fund, which held its final close with capital commitments exceeding USD 340m in July 2021, makes both buyout and growth deals, backing founder-owned lower-mid-market companies in the US, the UK and Asia, according to Unquote Data. It targets businesses in the technology and services sector, as well as the industrial technology and solutions sector. It focuses on companies with EBITDA of USD 5m-USD 15m, deploying equity tickets of USD 15m-USD 40m.

Freemarket's high quality and committed management team, as well as the multi-trillion-dollar B2B cross-border payments market in which it operates, were among the features that attracted the GP to the investment, said Holgate.

"This is a very large and resilient market which is seeing secular growth trends driven by increased adoption of digital and international payments," he said.

In addition to the core underlying growth in the market, there is an increasing propensity for customers to choose specialists providers such as Freemarket over the incumbent banks, given better customer service levels and integration capabilities enabling a significant market share gain opportunity, he added.

The fresh capital from Baird will support Freemarket's growth and international expansion, said the statement. M&A is not core to the plan "given the abundant organic growth opportunities available, but we will look at M&A opportunities opportunistically as they arise," said Holgate. Acquisitions will be made on a selective basis to enhance platform capabilities, as opposed to scale plays, he said.

Holgate has joined Freemarket's board of directors.

Baird Capital manages two investment platforms, namely Global Private Equity and US Venture Capital, and makes investments in B2B technology and services-focused companies around the world.

Company
Freemarket offers businesses access to cross-border payments and currency exchange in more than 140 currencies and across 100 countries through a single API integration and its proprietary platform. It aims to remove the complexities associated with cross-border payments, improving transparency and increasing efficiency.

People
Freemarket − Alex Hunn (founder and CEO).
Baird Capital − Michael Holgate (partner, global private equity team).

Advisers
Equity − Squire Patton Boggs (legal); Grant Thornton (financial, tax, & regulatory diligence); Oliver Wyman (commercial diligence); finnCap (M&A).
Company − Osborne Clarke (legal).