Piper Jaffray Companies has held the final close of Piper Jaffray Merchant Banking Fund II, a USD130 million growth equity fund.
With the closing of Fund II, Piper Jaffray Merchant Banking manages USD275 million of committed and invested capital through Fund II and its two prior growth equity funds.
Fund II will invest in commercial-stage businesses with strong growth prospects within industry sectors covered by Piper Jaffray equity research and investment banking. Fund II plans to make senior equity and equity-linked investments of up to USD15 million per company. Focus sectors include healthcare, technology, business services, financial technology and consumer. Given Fund II’s late-stage growth equity focus, portfolio companies will typically have a defined path to liquidity in a three- to five-year timeframe.
“Our investment strategy has been consistent since we launched our merchant banking business in 2008. Fund II will leverage Piper Jaffray’s personnel, expertise and relationships to find exceptional growth company investments, accelerate the path to success for each company and help guide each company to a successful exit,” says Tom Schnettler, managing director of Piper Jaffray Merchant Banking. “We are very pleased to close Fund II and thank all of our limited partners – both returning and new – for their support and confidence.”
Fund II attracted strong support from existing limited partners and added a number of institutional investors and family offices as new limited partners.
Since Fund II’s initial close in late 2017, the fund has made three investments in the following companies:
• Cafe Rio – Cafe Rio is an emerging leader in the Mexican fast-casual restaurant industry, building its brand with fresh, 100 per cent made-from-scratch foods. Cafe Rio has attractive unit-level economics, operating more than 100 units, primarily in the western half of the U.S.
• HemaSource – HemaSource combines proprietary inventory management software and data analytics with high-quality medical products and strong customer service to create the leading medical disposables distribution business in the plasma collection market and other ambulatory healthcare markets.
• Foodsby – Foodsby operates an online meal ordering and bulk delivery logistics platform. The company’s online platform enables primarily suburban office workers to order lunch from local restaurants, which is then delivered by the restaurant. Foodsby’s proprietary algorithms optimise supply and demand, and its delivery rules maximise delivery efficiencies, restaurant profitability and consumer satisfaction.
Fund II will be managed by the Piper Jaffray Merchant Banking team, which includes its three managing directors – Ted Christianson, Bob Rinek and Tom Schnettler. The Merchant Banking team has made 25 investments to-date and has generated 13 liquidity events, including the sale of Sport Ngin to Comcast NBC Sports, the sale of Torax Medical to Johnson & Johnson and the sale of LogRhythm to private equity firm Thoma Bravo.
