Today’s News
Elsewhere Partners has successfully raised USD 285 million for its third fund, aimed at acquiring stakes in small, rapidly-growing software companies located outside major tech hubs like Silicon Valley and Boston.
Image Source: Wall Street Journal
The firm typically targets investments ranging from USD 20 million to USD 50 million, mainly for majority stakes in business-software firms that have annual revenues between USD 3 million and USD 12 million. These companies are often bootstrapped, having grown through their own resources without significant external funding.
Image Source: Elsewhere Partners
Elsewhere Partners focuses on companies with strong products that need help expanding their operations, especially in sales and marketing. Chris Pacitti, co-founder and partner at Elsewhere, explained, “By definition, when you’re bootstrapping you’re under-resourced. The company founders love building products, but they don’t really like managing sales.”
The firm’s strategy includes investing time and operational expertise in addition to capital to help fill managerial gaps. This approach has attracted businesses from non-traditional tech areas such as San Diego, Denver, Omaha, and Montvale, N.J.
Elsewhere, which previously raised USD 175 million for its second fund in 2022, aims to grow these companies to make them appealing to larger investment firms.
“We think there’s an opportunity to create a feeder system into private equity and growth equity with [companies in] these elsewhere regions,” Pacitti added.
To support growth and address leadership needs at different stages, Elsewhere employs a network of operating advisors who can assume functional or executive roles. The firm has also invested USD 25 million from its new fund for a majority stake in Deskpro, a provider of enterprise and customer-support software. Deskpro’s customers include notable names like insurance giant Aon, cybersecurity firm Bitdefender, and Brown University.
Chris Padfield, Deskpro’s founder, highlighted the unique value Elsewhere Partners brings: “In the U.K., there are a lot of generalist [private-equity] firms. That can be great if what you’re looking for is just money, but I need to make the business grow faster. What I was really looking for was a real partner that can help make that happen.”
With plans to expand Deskpro, particularly by enhancing its U.S. operations and sales team, Elsewhere Partners is set to make significant strides in positioning itself as a crucial player in nurturing software companies outside traditional tech centers.
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