HR Tech SaaS – Unique VC/PE Investment Opportunity at Attractive Valuation

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by an investor from University of Southern California
in Los Angeles, CA, USA

1yr ago

HR Tech SaaS – Unique VC/PE Investment Opportunity at Attractive Valuation

I’m a Partner at a software-focused PE firm and came across an opportunity that isn’t a fit for us due to size but is compelling enough to share with the Searchfunder community to gauge interest in crowdfunding capital into an SPV that I would manage... details below.

• HR tech SaaS serving white-collar industries (tech, finance, professional services) in the mid-market and enterprise. Average annual customer contract value is around ~$40k. US-based company and customer base. • Expecting $2.5mn ARR forredacted% y/y ARR growth), with enough demand coming in to support plans for at least $6mn ARR in 2025 and $10mn+ in 2026. • High retention (90% gross / 120% net) and minimal burn ($2-4mn until profitability). • Opportunity to invest $6mn of growth capital for 75% ownership at an $8mn post-money valuation. • Remaining 25% is an option pool refresh for management, and current VCs ($10mn+ invested) exit entirely. • The existing founding/management team would remain in tact.
• I would assemble a board, and would be a board member + advisor.
• With a tangible path to $15-20mn ARR, I'd anticipate a $50-80mn exit via a sale to a tech-focused PE or strategic buyer, potentially returning 6x-8x MOIC in a 3-4 year timeframe.

If you are interested in learning more, please comment and I will contact you to share more details.

DISCLAIMER:
This post is for informational purposes only and is not an offer to sell or a solicitation of an offer to buy any securities. This opportunity may only be available to accredited investors who meet specific qualifications, and any potential investment would be structured through a private offering in compliance with applicable securities laws. If you are interested in learning more, please reach out directly to assess your eligibility.

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reply by a professional 1yr ago
from Duke University in New York, NY, USA

If anyone's interested in the HR Tech space, always happy to share some learnings - I was an early employee (product mgmt) at Charthop, a VC-funded HR tech startup

reply by a searcher 1yr ago
from Northwestern University in New York, NY, USA

Would love to connect as I am a former exited SaaS founder. Even if deal isn't a good fit for me, I might have some ideas for other searchers and investors.