TMT/Industrial Tech-Focused MM PE Firms

I'm halfway through my third year at my current fund. Received top marks during my annual and have a clear path to a promotion, but I know it is not a place I want to be long-term due to their investment style, industries of focus, etc. It was a great place to land as my first role in PE. After 2.5 years, however, I have a much better grasp on what I'm looking for long-term. I just let headhunters know that I'm searching, but wanted to see if the WSO community could point me towards any interesting firms that I should keep top of mind or try to network into. 


I narrowed down what I'm looking for in my next shop. The list includes: 

  • Industry focus on TMT or industrial technology (NOT generalists)
  • Middle-market focus  (i.e., current fund size of ~$400M roughly)
  • Desire to grow the fund (i.e., target fund size of close to $1B)
  • Growth equity / buy-outs
 
Most Helpful

I am pretty familiar with the industrial technology sector. The term is thrown around loosely and PE firms often play in various subsectors, but CORE in Chicago and LLR in PA are firms I've had good interactions with personally. LLR has a strong industrial technology practice and good culture, but their fund size is closer to $2B...

How important is industry focus versus fund size to you? Specialization is much more common in the UMM space than LMM space from what I've seen so you might want to prepare for trade-offs on those two points when you're comparing offers. 

Array
 

A few:

  • OceanSound (NYC):
    • Veritas spin
    • $300mm inaugural fund closed July 2020, undersubscribed to $750mm target
  • Diversis (LA):
    • Closed $675mm fund II in September 2021, oversubscribed to $500mm target
  • Vertica (NYC):
    • $205mm inaugural fund closed March 2020, "significantly oversubscribed" per press release
  • ParkerGale (CHI):
    • Chicago Growth Partners and William Blair spin
    • Closed fund II in 2018 at hard cap of $375mm, oversubscribed to $300mm original target
  • Periscope Equity (CHI):
    • Closed $225mm fund II in December 2020, oversubscribed to $200mm target

Edit:

  • CIP Capital (NYC):
    • DLJ (Credit Suisse) Merchant Banking spin
    • Announced $700mm fund III in 2019 (unsure on status)
 

If you’re talking about software with industrial applications (MES, plant mgmt, PLM, CMMS etc) - almost all major software funds will invest here. If you’re talking about industrial tech like hardware technology, there’s less specialized funds to my knowledge (a lot of risk and capital intensive space) but I know battery ventures does some things in this area in their growth and growth buyouts strategies (mainly buy and builds).

 

Here's a couple more. Most are fairly broadly oriented across software.

Boston

- M33 Growth: last fund was 250mn. General Catalyst spinout.

- Wavecrest: last fund was 290mn. Ex. BCV/Vista.

- Denali: first fund was 167mn. Ex. Summit.

- Elephant: last fund was 600mn. Ex. Highland 

New York

- Radian Capital: last fund was 300mn. Ex. BCV/FTV.

Austin

- Elsewhere Partners: last fund was 180mn. Ex. Austin Ventures.

Denver

- Crest Rock: closed first fund at 400mn. Ex. Marlin.

 

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