Anacacia makes another Australia e-commerce play
Australia’s Anacacia Capital has made its second foray into e-commerce in a fortnight with the acquisition of a majority interest in Mwave, an online video gaming and PC hardware retailer.
The size of the deal was not disclosed. Anacacia is currently deploying its third middle-market fund, which closed in 2018 at A$300 million ($223 million) and typically writes checks of A$15-60 million for profitable businesses with annual revenues of A$20-300 million. The firm recently acquired Pump Haircare, an organic hair products brand that primarily sells through a direct-to-consumer website.
Founded in 2006 by Victor Lee, Mwave claims to be Australia’s leading supplier of high-end computer products to the video gaming, e-sports, and PC enthusiast markets. It also has small and medium-sized enterprise (SME) business customers. The business has more than doubled in size in the last three years, with annual sales now exceeding A$150 million.
Lee will continue to be an investor in Mwave, while the existing management team will stay in place. Right Click Capital, a local VC player that first backed the company in 2013, also remains on the investor roster. Gary Levin, an experienced retail industry practitioner, is coming in as a co-investor and will take on the role of chairman.
“Mwave has a proven track record in the enthusiast gaming and computer industry. I see a huge opportunity for them to leverage their unique market position to grow their product range and market share on the back of a solid foundation in the fast-growing home entertainment sector, particularly the online market,” Levin said, in a statement.
According to PwC, Australia’s interactive games and e-sports market was worth A$3.18 billion in 2019 and is on course to hit A$4.43 billion by 2024. App-based games and e-sports are expected to be the main growth drivers.
E-commerce is an increasing target for Australian private equity investors generally. In addition to the Anacacia deals, Quadrant Private Equity has backed the likes of beauty products retailer Adore Beauty, industrial e-commerce platform Graysonline and baby care brand Love to Dream through its debut growth fund. Adore recently raised A$269.3 million in a domestic IPO.
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