Copilot Capital launches $200M fund to scale European software businesses

Copilot Capital, a newly established private equity firm dedicated to nurturing the next wave of European software leaders, has unveiled a $200 million fund.

This fund aims to propel ambitious software companies that are either bootstrapped by their founders or have outgrown the venture capital phase. The fund was co-founded and seeded by an investment division of The Friedkin Group.

Identifying a significant investment gap in the lower mid-market software sector across Europe, Copilot Capital intends to support companies with annual recurring revenues between €5 million and €15 million. The firm is committed to empowering founders to steer their businesses into the next stage of growth.

In the current challenging fundraising environment, capital for the lower mid-market has been scarce, despite the presence of many viable growth businesses in this segment. Many successful private equity funds have expanded their assets under management and shifted their focus to larger deals, while venture capital firms continue to allocate their resources to high-growth, 'power law' opportunities.

Copilot Capital aspires to become the go-to investment partner for software businesses poised for scale. It plans to take controlling stakes in maturing European software companies, leveraging its extensive operational expertise to help founders achieve further growth and profitability. The firm's focus areas include go-to-market strategy, international expansion, acquisitions, and the integration of data and AI.

Copilot Capital was co-founded by John Messer and Danny Friedkin. John Messer, formerly with Tenzing, has a notable track record in software buyouts, including leading a record-breaking return of 9.6x for CitNOW. Danny Friedkin is the Principal of The Friedkin Group International (TFGI), a global investment firm dedicated to creating and seeding new private equity firms. TFGI is a part of The Friedkin Group, known for founding and growing Gulf States Toyota and owning prominent entities such as the Italian football team AS Roma. Danny Friedkin is joined at TFGI by Charlie Daniel, the third co-founder of Copilot Capital.

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.”

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.

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.”