Apax Funds to Acquire Three Social Impact Software Firms for $2 Billion

Social Impact Software: A $2 Billion Platform Emerges

Contrary to popular belief, substantial financial gains can be realized through software designed to assist individuals and organizations focused on social good. Apax Funds, a private equity firm, has recently announced the consolidation of three firms dedicated to social impact, creating a unified platform valued at $2 billion.

Acquisition Details and Platform Components

To establish this comprehensive social good entity, Apax acquired EveryAction from Insight Partners and Social Solutions from Vista Equity Partners – both frequent participants in SaaS transactions.

These acquisitions are being integrated with CyberGrants, a company Apax previously secured in June. EveryAction provides a customer engagement platform specifically tailored for nonprofit organizations. Its focus isn’t on increasing sales, but rather on enhancing donor engagement.

Functionality of Each Platform

Social Solutions functions as a data collection tool, enabling organizations to analyze their activities and optimize service delivery. It also facilitates the measurement of progress towards established service objectives.

CyberGrants, meanwhile, is a corporate responsibility platform. It’s designed to assist companies in developing employee volunteer programs and maximizing the effectiveness of their philanthropic initiatives.

Synergies and Expected Outcomes

Erin Mulligan Nelson, CEO of Social Solutions, believes that merging these three companies will accelerate their individual advancements. “This collaboration will empower human services agencies within both the nonprofit and public sectors to fully leverage the potential of digital transformation,” she stated. “Our expanded offerings and opportunities for product innovation will deliver tangible value to our clients, improve outcomes for those they serve, and facilitate lasting social change.”

Challenges and Potential Benefits of Integration

While all three companies share a common thread – utilizing software to improve efficiency within a social impact framework – integrating these distinct entities into a single platform may present challenges. However, the resulting company will undoubtedly possess significant scale.

Financial Projections and Market Reach

Apax projects that the combined companies will generate $200 million in annual revenue. They currently serve 650,000 nonprofits and half of the Fortune 500 companies. Furthermore, they coordinate the efforts of 38 million donors and volunteers – a substantial reach.

Private Equity Perspective

Private equity firms typically seek investments in undervalued companies with potential for growth. The fact that Apax acquired these companies from other PE firms indicates a growing interest in this sector.

Funding History and Company Age

According to Crunchbase data, Social Solutions is the only company of the three to have secured venture capital funding, totaling $70 million. This included a $59 million investment from former Microsoft CEO Steve Ballmer in 2018. The companies themselves are relatively established, with EveryAction founded in 1997, CyberGrants in 1999, and Social Solutions in 2006. They may benefit from modernization or further investment from a firm like Apax.

Looking Ahead

The success of this consolidation remains to be seen. Whether a larger entity will prove more effective is yet to be determined. The transaction is contingent upon standard closing conditions and is anticipated to finalize this quarter.

Ultimately, Apax hopes to establish a leading force within this evolving landscape.