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Copilot Capital launches $200mm buyout fund to scale promising European software businesses

Copilot Capital, a new private equity firm focused on backing the next generation of European software champions, has launched a new $200mm fund formed to scale ambitious software companies that are bootstrapped by founders or have reached the end of the venture capital lifecycle. The fund was co-founded and seeded by an investment division of The Friedkin Group.

Recognising a gap for investing in lower mid-market software across Europe, Copilot Capital plans to back companies generating €5-€15 million in annual recurring revenue and empower founders to lead their businesses into the next growth phase.

Amidst a challenging fundraising environment, there has been a shortfall in capital directed to the lower mid-market, even though there are many sustainable growth businesses in this segment. Successful private equity funds have grown AUM and shifted their focus to bigger deals, while VC firms have continued to reserve their capital for high growth, ‘power law’ outcomes.

Copilot Capital aims to become the investment firm of choice for software businesses looking to scale, taking controlling stakes in maturing European software companies and using its deep operational expertise to help founders drive further growth and profitability, with a specific focus on go-to-market strategy, internationalisation, acquisitions and data & AI.

Copilot Capital was co-founded by John Messer and Danny Friedkin. John was previously at Tenzing, where he focused on software buyouts including leading the fund’s record return of 9.6x for CitNOW. Danny Friedkin is Principal of The Friedkin Group International (TFGI), a global investment firm focused on creating and seeding new private equity firms. TFGI is part of The Friedkin Group, a privately held consortium of businesses and investments that is best known for founding and scaling Gulf States Toyota and owning iconic organisations like the Italian football team AS Roma. Danny is supported at TFGI by Charlie Daniel, who is the third co-founder of Copilot Capital.

Danny Friedkin comments: “John’s focus on identifying overlooked potential aligns perfectly with The Friedkin Group’s approach. Our success has stemmed from making unique contributions to a founders’ growth journey, and finding value where others haven’t. We’ve backed many exceptional founders and management teams across a diverse range of industries. John and the Copilot Capital crew are the next chapter in that adventure.”

John Messer adds: “There are 60,000 SaaS companies across Europe. Many of these maturing businesses don’t fit the profile of a typical VC or buyout fund and fall through the cracks, despite their obvious potential. Our goal is to identify businesses with market-leading products and proven revenue models and equip them with the capital and expertise to scale into software champions.”

In tandem with the fund’s launch, Copilot Capital announced the fund’s first investment into Danish-based Relesys, an all-in-one employee app for frontline workers in the retail industry. The Relesys SaaS platform, which is used by leading organisations such as Specsavers, COOP, and Vue Cinemas, enables companies to boost frontline performance by combining employee communications, learning, and task management in a single user-friendly app.

The acquisition was a public-to-private transaction, with Relesys founders Jesper Roesgaard and Jens Ole Lebeck rolling the majority of their proceeds back into the business.

Jesper Roesgaard explains: “In Copilot Capital, we’ve found the right partner to take our business to the next level and become the leader in next-generation tech for frontline workers. In addition to funds to invest in our growth journey and market-leading employee engagement platform, Copilot brings strategic know-how, commercial and financial expertise, and a strong network in the retail industry. We share the same values for running a business like Relesys, and I am confident this is the best long-term solution for our customers and the entire Relesys team, which is also reflected in our reinvestment in the new set-up.”

Messer adds: “We love the vision Jesper and Jens Ole have for the business and the team they’ve assembled to turn this vision into reality. This partnership represents an ideal opportunity to combine Copilot’s human capital management and retail sector knowledge with Relesys’ best-in-class product. We are committed to supporting the continued growth of Relesys via further investments to accelerate sales as well as supporting their international ambitions as they look to become the pre-eminent solution for frontline workers.”