Solidified firm’s leadership in software
In raising Luminate Capital Partners’ second fund with $425 million of capital in 2018, Hollie Haynes secured the technology-focused private equity firm’s position as a consummate investor in middle-market enterprise software companies, earning her Mergers & Acquisitions' 2018 M&A Mid-Market Award for Dealmaker of the Year. The San Francisco firm, which Haynes founded in 2014 after a successful 15 years at technology investing powerhouse Silver Lake, has completed nine deals and delivered one exit and two recapitalizations to date. As the firm’s leader, Haynes works on deals, but also spends a lot time talking with investors and management teams, in addition to handling firm issues like financials, tax and IT. “We believe we have earned the right to take a leading position in our sector of the market,” Haynes said in an interview. Haynes is one of 36 dealmakers named in Mergers & Acquisitions’ 2019 Most Influential Women in Mid-Market M&A.
See the full list of Mergers & Acquisitions' 2018 M&A Mid-Market Awards.
Enterprise software: the gift that keeps on giving
Luminate backs middle-market software companies — those with $10 million to $50 million in annual revenues — from founders, early venture capital investors or carve-out deals. From its inception, the firm has focused on growth buyouts in enterprise software, a sector that has been growing in popularity with investors and dealmakers for good reason. “The enterprise software business model is hard to beat,” Haynes explained. “The businesses usually have recurring revenue, strong growth and good cash flow. And there are an endless number of problems to solve for enterprise customers. Building an enterprise-scale software company is outrageously hard. This sector is not for the faint of heart. But the rewards to success can be tremendous.”
Vote of confidence from LPs
The firm’s inaugural fund was closed in 2017 with more than $265 million in capital commitments. The successful raising of the sophomore fund, which was bigger and brought in new limited partners, is a testament to the firm’s strategy and acumen. “With this second fundraise, we had very strong support from our Fund I investors and validation of our investment thesis,” says Haynes. “Investors are seeing us refine our investment thesis. They have gotten more clarity around how Luminate operates, and we now have a stronger platform from which to invest.”
· Invested in AutoQuotes, a technology company in the foodservice industry.
· Supported the add-on acquisition of NetFacilities by portfolio company AMTdirect LLC, an accounting software developer.
· Invested in Conexiom, a developer of cloud-based supply chain document automation software.
· Reinvested in Financial Information Technologies, a payment software developer for the beverage alcohol industry.