GrowthCap is primarily focused on the business software and services sectors. We look for companies within these sectors that have demonstrated year-over-year revenue growth for a sustained period of time as well as strong customer retention. We have a high degree of flexibility in terms of company size, stage and situation. In particular, we look for unique circumstances where we can create effective solutions to unlock value for founders and management teams.
The business software sector represents a large, fast-growing segment of the technology industry generating in excess of $300 billion annually. 30,000+ companies provide a variety of niche software solutions. Within this sector, SaaS-based solutions (Software as a Service) represent even more dramatic growth.
SaaS represents an efficient delivery model for business software and related data, both of which are hosted in the cloud and accessed through the internet. Demand for SaaS is driven by the need for businesses to reduce IT-related costs, speed up deployment times and promote innovation. Another sought after benefit is that most businesses pay a subscription over time, avoiding the substantial upfront software license fees. Overall, the SaaS model provides more flexibility to businesses in a time of increased competition and economic uncertainty.
From an investment perspective, SaaS companies are attractive because of their strong recurring revenue base, superior margins, predictable growth and broad set of future potential acquirers.
The business services industry is comprised of companies providing business-related services to fellow companies. Companies in this industry offer a variety of services, including technology-enabled services, professional consulting, healthcare services, distribution, logistics, human resources, staffing, security, outsourcing, and marketing among other services.
Technology-enabled services are a combination of proprietary technology and services that help companies improve business operations through a targeted approach making individual processes and functions more efficient. These service providers leverage years of experience and develop precise solutions focused on one particular area such as security, compliance, accounting, sales, human capital management, workforce collaboration among other areas. Top performers in this sector sustain enduring client relationships by also leveraging global best practices and industry relationships and strive to provide customers with ever improving state of the art solutions.
Technology-enabled services companies exhibit attractive investment characteristics such as sticky client bases, recurring revenue, high margins and differentiated value propositions that lead to impressive competitive advantages.