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Climb Advisors Weekly M&A Deals Newsletter
Jasper acquires Clipdrop, 1Password buys Kolide
Nick @ Climb
February 25, 2024
Welcome to Climb Advisor’s weekly deal newsletter highlighting transactions announced last week across the B2B tech landscape.
Climb Advisors is an M&A and credit advisory firm focused on B2B software and services companies in the range of $5m to $100m+ enterprise value. We guide CEOs and business owners through the process of selling their business & assist investors in sourcing & closing great deals. We love to talk markets and share beneficial information - please reach out any time.
Aquiline Capital Partners and Level Equity announce majority investment in DocuPhase
Overview: PE firms Aquiline and Level Equity who focus on financial services and high growth software businesses, have acquired a majority stake in DocuPhase. The Tampa based company provides accounting and finance solutions such as document management and payment automation, to shorten approval processes associated with purchase orders, sales orders, invoice captures, payment approvals, vendor management and employee onboarding. Read more here.
Climb Comment: DocuPhase offers a number of automated services to the CFO office in large enterprises, with a focus on payments automation, processing north of 10m invoices annually for customers. As we discuss frequently, software serving the financial operations of organizations remain attractive to PE buyers based on their sticky nature - especially when there is an element of the platform touching the payments’ process itself - offering opportunity for supplemental high-margin revenue.
Level & Aquiline both have extensive experience & current holdings in adjacent spaces. Docuphase staffs around 100 employees per LinkedIn, was founded in 2000, and was most recently acquired by current CEO Dan Gaertner & Angle Point Capital in 2020. Kudos all around.
Cinven backed Archer acquires Compliance.ai to help manage risk and compliance
Overview: Archer, provider of a risk management and compliance platform to help organizations manage risk, compliance and meet challenges such as ESG and operational resilience, has acquired Compliance.ai. This deal sees Archer boost their platform’s AI capabilities to help automate monitoring, tracking, reporting, and responding to continually changing regulations in real time. Read more here.
Climb Comment: Cinven carved Archer out of ClearLake-backed RSA Global in April of 2023 and this marks their first announced transaction as new owners. Archer provides full-suite risk & compliance solutions to include document governance, vendor management, IT risk, and regulatory compliance oversight. Compliance.AI focuses on the regulatory piece - monitoring sources around the world to highlight mandated changes and updates as they happen to protect clients.
Bill Diaz, CEO of Archer, stated, "With this acquisition, we can offer our clients the advantages of real-time updates, predictive analysis, and increased accuracy for regulatory compliance and risk management."
TPG backed Delinea continues on M&A trail with acquisition of Fastpath from Pamlico Capital
Overview: Delinea, a provider of solutions to guard against unauthorized privileged access to a company’s critical resources, is featured in our newsletter for the second time in 2024 (the first being their January acquisition of Authomize [here]. They’ve just acquired Fastpath, a leader in Identity Governance and Administration (IGA), which helps clients manage user identities and access rights across their enterprise. Read more here.
Climb Comment: Cybersecurity, specifically governance, is one of the most prominent macro trends we see in software recently. This is reflected in the public markets as well, with businesses like Crowdstrike & Cloudflare trading near the top of the table in SaaS valuations. Governance is so key to cybersecurity because more often than not a breach is caused or enabled by a human user. As organizations and cloud environments grow more complex and more people touch more data in more places, it’s crucial for C-level risk managers to have the ability to roll out org-wide governance controls.
Phil Calvin, Chief Product Officer with Delinea, said of the acquisition —
By harnessing Fastpath's innovative solutions, Delinea will deliver the appropriate privilege with the right controls based on the users' risk score and the value of the data being accessed. Delinea will offer unparalleled security, efficiency, and control in managing the complex interactions between privileged users and corporate data … Priorities of CISOs are shifting away from protecting infrastructure and moving towards managing, monitoring, and protecting the interactions between human and machine identities with corporate data.
1Password continues to grow with acquisition of Kolide
Overview: The world’s most-used enterprise password manager, 1Password, has announced they’ve acquired endpoint security platform Kolide. Based in Boston, Kolide prevents unknown devices from accessing corporate apps whilst guiding users through steps to ensure their device is trusted once again. Kolide has raised $26.6m and their team of 30 is being retained post transaction. Read more here.
Climb Comment: Kolide is an access management platform that works via a framework of first freezing out a potential threat - blocking a potentially compromised device or account’s access to confidential apps - and then guiding non-technical employees through the process of restoring credibility and access without having to enlist help from IT. For example, if an employee needs to update their Macbook OS, Kolide will temporarily halt their access to enterprise systems until the issue is solved, and offer pop-up style help to get the process complete. Clear strategic fit for 1Password, who offer securely encrypted enterprise password management - moving them deeper into the employee governance stack.
Jasper reinforces European presence by acquiring Clipdrop
Overview: Leading generative AI company Jasper has announced it has struck a deal to acquire Clipdrop, an AI photo creation and editing platform, from Stability AI. It is understood that Jasper will offer Clipdrop through its platform as well as keeping it available as a standalone product in a move that sees the acquirer expand its product capabilities, AI talent and presence in Europe. Read more here.
Climb Comment: Interesting deal here in that Stability AI acquired Clipdrop in March of 2023, not quite a year ago. Stability AI is the business behind the Stable Diffusion, one of the better known AI image generation platforms. Stability AI and Jasper have partnered for years and it seems Stability models will still be delivered via Clickdrop. Jasper has gone to market as an ‘enterprise-ready’ AI co-pilot for marketers - offering more accuracy & better customization than off-the-shelf LLMs such as GPT-4.
Clickdrop is best known for user-friendly functionality such as image background removers, face-swaps, and more. The benefit to Jasper customers is clear, with Timothy Young, Jasper CEO stating -
"Marketing is visual. The addition of Clipdrop to Jasper will advance our vision to be the most comprehensive end-to-end marketing copilot in the industry, powering all the formats, channels, and functions enterprise marketing teams need.”
Podcast of the week
A very different one this week. Nick Bare, the founder of Bare Nutrition, announced he is returning to the role of CEO. Last year, he stepped away from the role early in year and also led the company through major raise to a PE fund that ultimately did not work out. In this video, he discusses the challenges of the raise and gives great detail on the process. We always tell founders / CEOs how challenging, time consuming, and distracting transactions can be so we recommend any of you thinking about engaging in a process for the first time to have a listen to this.
Thanks for following along & hope you found something useful or interesting.
All the best,
Nick