Australia's Potentia backs telecoms technology player

Potentia is acquiring its position from Sydney-listed radio and digital media company HT&E, which described the deal pricing as attractive in light of recent weakness in technology markets, including the communication platform services niche.

Soprano provides technology that enables text, voice, email, instant messaging, and omnichannel messaging to enterprises and government organisations globally. It claims to offer “a total solution, tailor-made with the security, controls, compliance, unique insights, and system agility required for tackling the toughest modern communication challenges.”

The Sydney-based company, active since 1994, has regional teams in Europe, the Americas, and Asia Pacific. It claims to have more than 4.5m active users and 4,500 customers. In addition to Telstra and AT&T, partners include Singapore’s StarHub, Smart Communications of the Philippines, and BT, the largest telecom in the UK. It works with Vodafone in New Zealand and Europe.

Potentia, a B2B technology specialist, closed its second fund on AUD 635m last June on the back of a string of robust exits. These included mining software provider Micromine, which achieved an almost 10x return, as well as staff management players Ascender (16x) and CompliSpace (4.3x).

Andrew Gray, co-founder of Potentia, told AVCJ last month that he expects up to four deals to be confirmed in the first quarter of 2023, including two large enough to mobilise both the GP’s funds. There are also plans to make platform investments in Southeast Asia from a recently established base in Singapore.

“The types of businesses we’re investing in – B2B software – are quite resilient to global macroeconomic challenges,” Gray said, flagging China-US decoupling and a high inflationary environment. “The pipeline we’ve seen hasn’t really dropped and vendor expectations are starting to align with the current market outlook. We are as busy as we’ve ever been right now.”

Potentia is currently pursuing two listed companies – Nitro Software and Tyro Payments – despite several rejections based on valuation disputes. The offers for both companies have featured support from LPs including HarbourVest Partners. Historically, about half of Potentia’s transactions have leveraged LP co-investment.

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• Topics
• Australasia
• Support services
• Technology
• Expansion
• Australia
• Potentia Capital