Australia’s Potentia closes Fund II on $438m

Potentia’s first fund was launched in August 2019 and closed on AUD 382m in January last year. The firm, which positions itself as Australia’s only private equity investor exclusively focused on software and tech-enabled businesses, now claims more than AUD 1bn in total assets under management.

Potentia was established by Andrew Gray, formerly of Francisco Partners and Archer Capital, and ex-MYOB CEO Tim Reed in 2016 to fill a perceived mid-market technology funding gap. Most of the investment in this space has historically been provided by foreign firms.

Fund II was raised almost entirely virtually from new and existing institutional investors. They include asset managers, consultants, insurance companies, family offices, foundations, fund-of-funds, and superannuation schemes from the US, Europe, Australia, and Asia.

Potentia targets growth capital and buyout investments across Australia and New Zealand where companies are considered to have proven business models and significant potential for growth through specialist sourcing and partnership support. Fund II will differ from its predecessor with a stronger focus on New Zealand.

There are also plans to appoint an executive in Singapore to scout for Asia bolt-on opportunities. Potentia has completed nine platform investments and eight bolt-ons to date, with notable portfolio companies including mining software provider Micromine, retail software and payments gateway Linkly, and B2B e-commerce platform Commerce Vision.

Notable exits include the sale of payroll software specialist Ascender last year to US strategic Ceridian, which generated a 16.4x multiple. The deal, transacted jointly with fellow investor Five V Capital, was said to be worth around AUD 500m. This followed the sale of compliance software-as-a-service provider CompliSpace to UK-based Ideagen for about AUD 110m after a less-than-two-year hold, generating a 4.7x multiple.

“The entire Potentia team are excited about the investments this fundraise will facilitate, the founders & management teams we will be able to back, the clients those businesses will be able to support and the returns those investments will generate,” Reed said in a statement.

“At our core we believe technology is improving the world – making it safer, more productive, lowering environmental footprints and enabling better outcomes. Potentia Fund II will allow us to achieve these outcomes at an even greater scale.”

Asante Capital acted as Potentia’s global fundraising adviser.

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• Topics
• Australasia
• Fundraising
• Buyout
• Growth
• Technology
• Australia
• Potentia Capital
• Fundraising