A leading private equity investor has said the competition to聽invest in the best tech companies is as fierce as he can remember.
Matthew Caffrey is a partner at mid-market private equity firm Livingbridge, which has a track record for investing in聽tech firms including Metronet and Exclaimer, the largest global provider of email signature software.
He told 老九品茶Cloud the competition was creating 鈥渄ouble digit multiples鈥� and higher.
Livingbridge typically invest between 拢2m and 拢50m of equity and Caffrey says there is no shortage of investors looking for tech firms with a secure recurring revenue stream.
鈥淚t鈥檚 as competitive as I鈥檝e known it,鈥� he said.
鈥淐ertainly if you鈥檙e selling a technology business at the moment you鈥檙e not short of people to talk to.
鈥淲e鈥檙e seeing multiples north of 10x. For really great assets they鈥檙e stretching up towards 13x or 14x.
鈥淚f you a web-based business, potentially in social media or you have a business that is developing apps, then there鈥檚 always the hope from the entrepreneur that they may have a unicorn on their hands.
鈥淚 think for businesses that are more software-based, certainly managed services or connectivity-based, these entrepreneurs are looking for partners to work alongside their business.
“What we鈥檙e good at is working with these types of individuals.鈥�
Caffrey, who has worked at Livingbridge for 12 years, had mixed views on the impact of Brexit.
鈥淏rexit doesn鈥檛 feel like it鈥檚 causing an issue at the moment,鈥� he said.
鈥淚鈥檝e no doubt that it will impact on the market depending on the type of exit we have from the EU. I think it鈥檚 a 鈥榳atch this space鈥� question.
“Confidence still seems to be there. For the moment I think it鈥檚 business as usual.鈥�