Capital injection brings the firm’s war chest up to $690 million CAD.
Toronto and Orlando, Fla.-based Arcadea Group, which acquires vertical software-as-a-service (VSaaS) companies, has secured $243.5 Million USD ($336 million CAD) as it looks to accelerate its acquisitions.
Arcadea said the raise was supported “pro rata” by its existing investors, and increased its permanently committed capital to $500 million USD ($690 million CAD). Arcadea says it focuses on investing in and acquiring bootstrapped, founder-controlled VSaaS businesses in North America, Europe, Australia, and New Zealand.
Arcadea declined to provide comment on the record regarding the financing or any aspect of the business.
Founded in 2021 by two ex-Constellation Software directors, Paul Yancich and Daniel Eisen, Arcadea says it focuses on deals with companies making $1 million to $20 million in annual recurring revenue. The firm structures deals either to provide primary capital for more than 50 percent growth, or to perform a majority recapitalization and buyout, according to its website.
Some of Arcadea’s backers are based in the United States and include medical conglomerate Danaher Corp co-founder Mitch Rales, private capital investors Ed McGuire and Ian McDermott, and Sator Grove Holdings, according to a 2021 article from The Globe and Mail.
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Arcadea claims it sets itself apart from private equity, growth equity, and other VSaaS rollup companies by being “share-owner focused on permanent capital appreciation” through long-term company growth “over decades” rather than prioritizing exits.
While Constellation mostly focuses on founder-operated and corporate businesses, The Globe and Mail reported the serial acquirer put out a call for Canadian venture capital-backed companies in March as “an experiment.” The call has not yielded any acquisition announcements to date.
Another Canadian VSaaS acquisition company, Montréal-based Valsoft Corporation, secured $229 million CAD ($170 million USD) in growth funding to expand its portfolio in January. Much like Arcadea, Valsoft says it’s acquired businesses continue to operate as they did before, but with additional support and expertise from its network. Last month, Valsoft completed its sixth acquisition since securing the new funding.
UPDATE (07/30/2024): A reference to Constellation Software was removed. An earlier version of this story implied that Constellation Software is a VSaaS rollup company that prioritizes exits over long-term growth. BetaKit regrets the error.
Feature image courtesy Michael Fousert via Unsplash.