PSG Equity held the final close for its second Europe-focused fund with more than €2.6 billion ($2.8 billion) in capital commitments.
PSG Europe II, which is one of the largest growth equity funds raised to invest solely in European software companies, has raised significant capital from pension funds since 2021, including:
- Texas Municipal Retirement System: $100 million
- Washington State Board of Investment: $199 million
- New York State Common Retirement Fund: $110 million
- Pennsylvania State Employees’ Retirement System: $75 million
The preceding fund, PSG Europe I, closed in 2021 with more than €1.3 billion in commitments. Europe is the second largest IT and software market globally after that of North America, where PSG Equity has a dedicated fund (PSG VI) that is currently raising assets.
“The tremendous growth we have experienced in Europe since our inception is a testament to the success of our investment strategy and to the quality and dept of our growing team,” said Dany Rammal, managing director and head of Europe at PSG in London. “Our cross-border M&A expertise, local knowledge and relationships, and the operational support we can provide to management teams, make us a partner of choice for ambitious and innovative founders looking to create pan-European software champions and expand internationally, including in North America.”
According to PSG, the European IT market is expected to reach $309 billion in size by 2026. The firm sees growth across all sectors for tech as business processes continue to be digitized at an increasing rate thereby creating a growing market for B2B software businesses.
PSG has one of the largest global teams focused solely on investing in growth stage B2B software companies and is one of the sector’s most active investors in Europe. PSG’s European team was established in 2019 and consists of 57 professionals. Headquartered in London, the group has additional offices in Paris and Madrid.
PSG’s investment strategy focuses on scaling single-country, single-product software companies through organic and inorganic growth into multi-country, multi-product pan-European champions across multiple markets, supporting its portfolio companies’ global growth ambitions. The firm emphasizes that its strong track record in the U.S. can be leveraged as the firm can be a strong supportive partner to portfolio companies looking to expand in North America.
To date, PSG has made 22 platform investments in Europe with the acquisitions of Hostaway, Artur’in, Billwerk+, Hornetsecurity, Imaweb, Mapal Group, Nalanda Global, N2F, Nomentia, Powens, Rapid Data, Rodeo, Sellsy, Sesame, Signaturit, Skeepers, Sport Alliance, Tellent, Visualfabriq, Whoz, Zenchef and ZeroNorth, and facilitated over 60 add-on acquisitions with operations in 15 European countries.
“We will leverage our global software expertise to accelerate investment in innovative businesses that are using cutting edge technologies like generative AI, to drive growth and automation across cybersecurity, fintech, payments, verticalized ERP and CRM and workforce management, among others,” Rammal added.
