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Central and Eastern Europe: A rising force in global tech and innovation
1. Economic and Digital Convergence
The CEE region has a total population of more than 130 million people – higher than the sum of DACH region and Sweden’s –, and accounts for approximately 30% of the European Union's total population of approx. 450 million. The region’s combined GDP was more than $2 trillion in 2023, close to Canada’s total ($2.24 trillion).
The economic progress of the CEE region is unmistakable. Countries such as Hungary, Czech Republic, Slovenia, and Poland have significantly improved their GDP per capita since 2018, steadily closing the gap with the EU average. This trend reflects broader economic development, increased purchasing power, and improving business conditions across the region.
Annual revenue growth in IT services in the next 5 years is expected to exceed the EU average in every major CEE country, that forecasts a strong and sustained digital boom.
2. A Thriving ICT sector with strong foundations
The ICT sector plays a central role in the region’s economic future. The CEE region is rapidly advancing as a digital hub, with countries like Croatia, Czechia, and Estonia exceeding the EU average. The increasing investments in digital infrastructure such as data centers and cloud services highlight infrastructural development while EU-backed initiatives alongside regional collaborations also underscore how regulatory frameworks drive growth in the region.
In some CEE countries like Bulgaria and Hungary, the value added by the ICT sector already exceeds the EU average. The region boasts a higher share of ICT employment and nearly double the number of ICT companies per 1,000 inhabitants, showcasing an increasingly vibrant tech ecosystem.
Supporting this momentum is a deep pool of local talent, tech engineers ranked top performing based on various rankings. The proportion of ICT graduates across CEE countries consistently surpasses the EU average.
Romania leads the way, with over 6% of graduates specializing in ICT fields, a key factor in attracting tech investment and innovation.
Furthermore, labour costs remain significantly lower in CEE than in Western Europe. In 2024 the hourly labour costs across the region are often under €20, while IT salaries are more than 30-40% lower than in Western tech counterparts like Germany, the Netherlands or Luxembourg. For global tech firms, this combination of affordability and quality talent is hard to ignore.
Consequent to the recent Ukrainian-Russian war, the CEE tech pool is experiencing a large influx of IT talent relocating from Ukraine, which boasts one of the largest developer communities in Europe.
3. Global Players and CEE
Recently the CEE region has become a magnet for multinational corporations and global tech leaders, already drawn many multinational companies like Microsoft, Google, Intel, Oracle, and HP in the past to establish a strong presence here.
OpenAI CEO Sam Altman has publicly praised Poland’s engineering talent, calling it crucial to OpenAI’s success. OpenAI’s plans to open European headquarters in Poland signal growing confidence in the region’s innovation potential.
4. Tech sector: the heart of M&A activities in the region
The technology M&A sector plays a key role in the region, accounting for 15-25% of all completed deals in CEE and contributing 10-30% of the region's total deal value through the years. Western investors – especially from the US, Germany, and the UK – dominate inbound deal activity, drawn by strong fundamentals and a high return potential.
CEE startup exits have quadrupled over the past decade,
including Croatia’s Photomath acquired by Google, and Bulgaria’s Pliant bought by IBM.
In 2023, nearly 40% of funding came from outside the region, especially from Western Europe and North America, increased from 2021’s figure of 30%.
AI has become a key focus – 45% of all funding in 2023 was directed toward AI-related startups. Vertical sectors such as enterprise software, security, fintech, and robotics are among the most heavily funded.
UiPath’s Global success – a relevant example
Romania-based UiPath is a prime example of the CEE region’s tech potential. Founded in 2005, the company transformed from a small RPA startup into a global automation leader. Backed by early investment from CapitalG (Google’s venture arm), UiPath rapidly expanded, acquired multiple companies, and eventually launched a $1.3 billion IPO on the NYSE—one of the largest US software IPOs in history.
Today, UiPath serves clients in over 30 countries and employs more than 4,000 people globally, embodying the rise of CEE as a launchpad for world-class tech firms.
Conclusion
Central and Eastern Europe is not just an emerging player, but a rising future force in the global technology arena. The region combines fast-growing economies, digital readiness, abundant technical talent, low operational costs, and increasing investor confidence. With a supportive policy environment, strong startup activity, and a proven track record of scaling global tech successes, the CEE market is set to outpace much of Europe in digital transformation.
For companies, investors and entrepreneurs seeking high-growth opportunities, CEE stands out as one of the most promising frontiers in the global tech landscape.
Sources:
https://databank.worldbank.org
When and why should a scaleup get a private equity on board and what does it change?
Why Private Equity? Timing, Strategy, and Opportunity
Both companies entered the PE universe with different motivations, but a shared recognition that scaling sustainably required more than own capital available and organic growth.
For WTS Klient, the trigger was internal due to different visions. This divergence created a natural inflection point where bringing on an investor provided liquidity and strategic alignment.
In Finshape’s case, the PE partnership emerged during a moment of strategic ambition. After a management buyout, the team saw an opportunity to merge with a similar Czech-based company. This merger required immediate capital and the ability to execute a cross-border M&A—something only a capable PE partner could support.
In both cases, the decision wasn’t about a lack of ambition but about enabling the next phase of that ambition through structure, capital, and expertise.
What Changes When PE Enters the Room?
While financial resources were a clear value-add, both founders emphasized the operational transformation that comes with private equity investment. Reporting, strategic planning, and performance tracking became more formalized and more demanding.
“PE didn’t mean losing control - but it did mean more structure, more KPIs, and real accountability.”
said Jozsef Nyiri, referencing their use of the 'Rule of 40' to combine profit margins and growth rate to benchmark success.
For WTS Klient, it meant upgrading internal systems and introducing new layers of professional management to support a tripling in headcount over just a few years.
Tamas Gyanyi added that investor oversight brought more than just pressure – it brought professionalization.
“We became more efficient. We didn’t just grow in size—we grew up as an organization.”
he said.
Integration and Culture: Growth with a Human Lens
With private equity often comes consolidation—and with that, the challenge of integrating teams, processes, and cultures. Both WTS Klient and Finshape experienced this firsthand.
WTS executed multiple acquisitions in short succession. While this enabled rapid expansion, it also introduced high staff turnover in the acquired firms. Rather than see this as a setback, Gyanyi framed it as an opportunity to re-staff with future-oriented, culturally aligned professionals. The firm also launched an employee ownership program to retain top talent and strengthen internal alignment with long-term goals.
Finshape invested the time by face-to-face interactions and fostering mutual understanding, the firm gradually aligned its leadership culture.
In both companies, a central theme emerged: preserving core values amid scaling requires intentionality and communication. Social initiatives, direct engagement from top leaders, and open-door practices helped maintain a sense of unity even as operations expanded.
The Role of AI and Digitalization in Future Growth
As both companies look ahead, technology and AI are expected to play a larger role in driving efficiency and profitability. WTS Klient is already leveraging AI through its global network’s digital platform, which supports faster, semi-automated tax advisory responses. The firm also anticipates AI playing a bigger role in payroll and HR automation, reducing the need for manual roles and.
“We’re already using AI to semi-automate tax advisory. In payroll and HR, it’s going to help us scale and enhance EBITDA margins.”
said Tamas Gyanyi.
At Finshape, digitalization is embedded in the product, but operational AI initiatives – like measuring developer efficiency or improving test case throughput – are also becoming areas of focus. The investor’s support in bringing financial and analytical rigor is seen as a key enabler of such innovation.
“Even internally, we use AI to track developer efficiency or speed up test cycles—it’s becoming part of our operating rhythm.”
added Tamas Nyiri.
Balancing Investor Goals with Founder Vision
Despite the operational enhancements and strategic benefits, the founders acknowledged that conflict is sometimes part of the journey. Differences often arise in areas like sales strategy, where investor-level perspectives may not always align with on-the-ground realities. However, both founders expressed appreciation for the tension, as it often results in better outcomes when managed through transparency and mutual respect.
They also reflected on the personal growth required to operate in a PE-backed environment. Learning integration strategy, managing complexity, and accepting board-level scrutiny are all part of the evolution from founder to scale-up leader.
Crucially, both companies were able to retain their entrepreneurial spirit—not despite the investor, but often because of the structure and discipline the investor introduced.
“Sales is like football – everyone thinks they’re a coach.” Jozsef joked. “There were debates, but constructive ones. And we’re better for it.”
“I had to learn integration, HR, investor reporting – things I never planned for. But I’m a better leader now because of it.”
Tamas reflected.
Final Thoughts
The session concluded with a sense of measured optimism and maturity. For both WTS Klient and Finshape, the journey with private equity is not just about funding expansion, it's about scaling with intention, structure, and cultural integrity.
Private equity is often viewed through a transactional lens, but this panel made clear that it can be a deeply transformative partnership—one that helps companies not just grow faster but grow better.
As both founders continue executing their buy-and-build strategies, the lessons from this session reinforce a broader truth: when aligned with the right partner, private equity can be a powerful force for long-term, people-centric value creation.
Read the Investor perspective here.
If you're looking to understand how the private equity space works and who the active players are, reach out and let’s have a chat.
What is the outlook for 2025-2026 in private equity deals?
Outlook for 2025–2026
The session opened with a macro-level view of the market. Following a period of inflated valuations and unpredictable fundraising conditions, investors now see stabilizing trends and greater clarity for deployment.
According to recent figures, the volume of CEE PE buyouts remained relatively stable compared to previous years, with approximately 150 deals executed, similar to 2022 and 2023. On the exit side, the number of PE-backed exits in the region saw a slight increase, which is a promising sign for liquidity. Although, deal values again fell, which aligns with global observations that valuations have normalized from the overheated levels of 2021 and early 2022.
Despite the challenging environment, several private equity firms remained highly active in the CEE region (including our guest, Abris Capital). This continued presence of leading firms underscores the long-term strategic commitment to the region, even in a cooling market.
The outlook among professionals remains cautiously optimistic. As noted in a supporting survey, 91% of respondents expect PE activity to increase in 2025, with strategies focusing on market consolidation and buy-and-build approaches. However, macroeconomic factors (such as geopolitical instability and slowed economic growth) are expected to weigh heavily on deal-making strategies in the near term.
“There’s been a consolidation in valuations… targets are no longer overpriced, which is finally making room for deals again”
noted Tomasz Hajduk from Abris Capital.
Both firms confirmed from their own experience that there is a gradual reactivation in the market, in line with broader expectations. This creates a more favourable environment for executing deals, especially for funds already well-capitalized and experienced in CEE dynamics.
Platform Deals and the Buy-and-Build Model
A core focus for both Abris and Provectus remains the buy-and-build strategy, which they view as the most effective approach to value creation in fragmented sectors. Provectus has leveraged this model across several verticals, particularly healthcare, where they’ve built leading regional players through a series of add-ons.
Rather than passive acquisitions, the emphasis is on active operational development—professionalizing management, centralizing procurement, and investing in shared services. The result is not just revenue growth but the creation of platform companies that are structurally scalable and strategically differentiated.
“We focus on fragmented markets where you can consolidate smaller players into a dominant group – that’s where real value creation happens”
said Marko Galic, referencing Provectus Capital's success in healthcare.
Similarly, Abris employs buy-and-build as a foundational strategy, but also looking for transformational deals.
Their portfolio includes businesses that have undergone full-scale transformation. Not just geographic expansion but business model reinvention. This includes shifting traditional service companies toward digital, tech-enabled revenue models, which provides multiple levers for future growth and exit readiness.
Founders as Partners: Transition Planning Is Key
For PE firms, the acquired company’s team and management are key, and both firms approached the founders and management with a clear, structured process. Founders are typically retained to preserve institutional knowledge and ensure continuity. However, investors expect early conversations around succession planning and the professionalization of leadership.
Rather than abrupt changes, the model is built around gradual transition—starting with strategic hires such as CFOs and COOs who can prepare the business for its next phase of growth or eventual sale. The ability to manage this transition smoothly is seen as a key differentiator in the CEE context, where many companies are still founder-led and under-resourced in senior management.
VCs Turning to PE: A Growing Trend
One emerging dynamic in the region is the increasing number of VC-backed companies seeking exits through PE. As capital availability in venture markets contracts and IPO paths remain limited, many startups that have matured but not scaled explosively are looking to PE as the next logical step.
“We’ve had VC-backed firms approach us after growth slowed. We step in with majority control, operational expertise, and turn them into profitable add-ons.”
said Tomasz.
This is particularly true for companies that have strong fundamentals but need operational discipline and a route to profitability. PE firms see these as attractive add-on candidates or, in some cases, small platforms. While these opportunities require a mindset shift—from founder control to PE governance—they are becoming more frequent and viable as the ecosystem evolves.
ESG and AI: Practical Applications in Value Creation
Environmental, Social, and Governance (ESG) factors are no longer just compliance items, they are fully embedded in investment processes. Both firms conduct ESG due diligence on every deal and apply structured improvement targets post-acquisition. ESG performance is now directly tied to incentives and increasingly considered essential for any successful exit, especially when selling to Western strategic or financial buyers.
“Our portfolio companies report on ESG alongside financials and management bonuses are tied to those targets.”
said Marko.
On the AI front, investors are selectively integrating tools for market mapping, reporting automation, and portfolio company operations. While proprietary AI development remains limited, commercial tools with embedded AI capabilities are reducing manual workloads and improving operational efficiency. Use cases, such as content automation for e-commerce platforms, demonstrate how even small innovations can unlock significant productivity gains. At the same time, they made it clear that despite AI’s great potential, they won’t act like VCs. For them, early-stage deals are off the table, as their investment thesis and mandate remain firmly rooted in the private equity approach.
Closing Reflections
The session concluded on a grounded but positive note. Both Hajduk and Galic emphasized that while uncertainty remains a feature of today’s markets, it also creates opportunities for investors who stay disciplined, focused, and adaptable.
In their view, private equity in CEE is entering a new phase—one that favors strategic clarity over market timing, active value creation over financial engineering, and partnerships with entrepreneurs who are ready to evolve.
As 2025 unfolds, the message from leading investors is clear: with the right model, right sectors, and right relationships, CEE remains one of Europe’s most promising regions for private equity success.
Read the Founder perspective here.
If you're looking to understand how the private equity space works and who the active players are, reach out and let’s have a chat.
Decoding CEE M&A: Key Insights into Tech M&A Trends in Central Eastern Europe from H2 2024
Pattern #1: B2B niche targets are attractive for vertical software firms
- Example to highlight:
Upliift, a London-based investor, focusing on European B2B software firms with revenues between €1-25 million acquired SRC, a Slovenian software development firm with over 200 employees and a presence across several countries in the CEE region.
- Pattern explained:
This transaction aligns with a recent trends in the region, where a new class of investors such as Vesta Software Group, Everfield, saas.group, Jonas Software or Constellation (and many more) target cashflow-positive, founder-owned B2B software companies in niche markets. Unlike traditional strategic buyers, these investors prioritize maintaining the independence of acquired companies, fostering growth without full integration.
Pattern #2: Prior partnership with acquirer increases the chances of transaction success
- Example to highlight:
The recent acquisition of Polish companies Mediarecovery and SafeSqr by Dutch firm DataExpert, which was rooted in over a decade of increasingly close cooperation between the two entities. DataExpert has employed a similar strategy in the past, collaborating with Swedish Forensic Experts Scandinavia AB before acquiring them in 2018.
- Pattern explained:
When acquisitions stem from years of cooperation, buyers gain a deep understanding of the target's strengths, values, and potential revenue impact. This prior collaboration can also benefit the target by justifying a higher purchase price, often supported by proven results.
Pattern #3: Private Equity fuels inorganic growth
- Example to highlight:
Software Mind, a Polish software development services provider, backed by Enterprise Investors – one of the largest Private Equity funds in Poland and the CEE region, acquired Gama Software, a software development company based in Romania.
- Pattern explained:
The involvement of PE firms is a key driver of M&A activity in CEE. Companies backed by PE often pursue aggressive buy-and-build strategies to scale and expand. As a result, these companies tend to engage in more acquisitions than their non-PE-backed counterparts, as growth is a key expectation from private equity investors.
Pattern #4: Consolidation is the good old strategy for growth
- Example to highlight:
Bianor Holding’s acquisition of Prime Holding and Digital Lights in Bulgaria demonstrates a strategic move to consolidate capabilities and strengthen competitive positioning in the industry.
- Pattern explained:
Consolidation is a powerful strategy for everyone, in this case, for IT service providers in the CEE region seeking to compete on European and global stages. To effectively challenge larger players in other markets, these companies must increase their size by pooling resources and expertise, allowing for faster scaling. As some CEE firms strive to penetrate these larger markets, size and operational capacity become crucial factors for success.
Pattern #5: Timing can make or break a deal
- Example to highlight:
Moj-eRačun, Croatia's leading provider of SaaS business tools, specializes in digitizing administrative tasks with its flagship product that offers e-invoicing and document management solutions. This product seamlessly integrates with over 400 ERP systems, providing a substantial competitive advantage as Croatia prepares for mandatory B2B invoicing set to be implemented in 2025.
- Pattern explained:
Timing significantly impacts deal success, especially in markets preparing for regulatory shifts. This upcoming regulation is anticipated to drive demand, adding competitive value. The favourable timing and anticipated revenue growth contributed to a noteworthy valuation in the acquisition by Visma, a Norway-based software provider with an existing track record in the region.
Summary
From niche B2B acquisitions to strategic timing, these insights reveal the diverse approaches shaping tech M&A in the CEE region. Understanding these patterns can be crucial for investors and companies alike, as they navigate the unique dynamics of Central Eastern Europe’s evolving tech landscape.
At Absolvo Consulting, we are actively managing transactions for tech and innovation-driven companies across Central and Eastern Europe. Our daily interactions with strategic buyers and private equity firms give us unique insights into investor priorities, emerging investment trends and market dynamics. This helps us gain a precise understanding of investor needs and focus areas, so we can tailor our deal strategies for our client’s projects to meet these specific requirements.
Tech savvy & wealthy: Ranking Europe’s top 10 Private Equity firms by dry powder for tech deals – 2023 Q3 edition
Private equity firms play a crucial role in funding and supporting the growth of companies across industries, including Information Technology and tech-enabled services. In this article, we will explore the top European private equity firms with the largest dry powder and strong focus on investing in tech companies across Europe.
Here we provide an overview of each firm’s investment strategy, their dry powder, and their successful investments and exits, primarily in the tech sector, based on Pitchbook data available until April 2023. The following firms have the capability to offer strategic support beyond capital that are essential for companies aiming for significant growth.
Top 10 European PE firms by dry powder available:
- 10. AlpInvest Partners
Dry Powder: 8.84 billion EUR
HQ: Amsterdam, The Netherlands
Web: https://www.alpinvest.com/
AlpInvest Partners is a highly experienced global private equity firm with a substantial dry powder of 8.84 billion euros, managing an impressive 59 open funds and overseeing assets under management exceeding 60 billion euros. Renowned for its track record of over 1,000 successful investments and a dynamic portfolio of 49 companies, AlpInvest has established a sterling reputation for its acumen in recognizing and allocating capital to cutting-edge enterprises across diverse sectors.
AlpInvest has made astute investments in an array of companies, exemplified by its acquisition of Profi Rom Food, a leading European retail chain based in Romania, in February 2017 for 575 million euros through a co-investment, buyout deal. Additionally, AlpInvest has demonstrated its prowess in the telecommunications sector through its strategic investment of 202 million euros in Euskaltel, a Spanish telecommunications company, in October 2012 as part of a co-investment growth deal. Notably, AlpInvest has played a pivotal role in fostering the remarkable growth of Euskaltel during its ownership tenure, culminating in a successful exit in August 2021 for a substantial 2 billion euros, delivering impressive returns to its investors. Apart from Euskaltel and Profi Rom Food, AlpInvest’s investment history boasts a roster of well-known companies, including Cushman & Wakefield and Avaya.
With a legacy of more than 250 successful exits, AlpInvest has firmly established itself as a trusted partner for generating significant returns through strategic investments and value creation. The firm remains steadfast in its commitment to fostering the growth and development of its portfolio companies and has a proven track record of successful collaborations with visionary leaders in the business world.
- 9. Bridgepoint
Dry Powder: 9.99 billion EUR
HQ: London, UK
Web: https://www.bridgepoint.eu/
Bridgepoint Advisers, a leading private equity entity, has a robust collection of 14 investment funds and oversees an astonishing 40 billion euros in managed assets. Acclaimed for its exceptional talent in discerning and investing in revolutionary companies across a wide range of industries, including the field of information technology, the firm boasts a remarkable history of achievements with more than 600 prosperous investments and a dynamic portfolio of 70 active companies. Armed with a substantial reserve of 9.99 billion euros as dry powder, Bridgepoint Advisers is aptly equipped to seize profitable prospects in the dynamic market landscape. The company primarily invests across four verticals, which are advanced industrials, business and financial services, consumer, and healthcare, with technology as a horizontal connected to everything everywhere.
Among its successful investments, Bridgepoint Advisers acquired Dr Gerard, a Polish food company in October 2013 through an LBO. Additionally, in January 2015, the firm made a successful investment in eFront, a renowned software provider of alternative investment management solutions, with a leveraged buyout worth 430 million euros. During its ownership period, Bridgepoint Advisers demonstrated its expertise in the sector by supporting eFront in achieving substantial growth. In May 2019, the firm successfully exited its investment in eFront for 1.16 billion euros, resulting in significant gains for its investors.
- 8. Nordic Capital
Dry Powder: 14.08 billion EUR
HQ: Stockholm, Sweden
Web: https://www.nordiccapital.com/
Nordic Capital is a distinguished global private equity firm that boasts a dry powder of 14.08 billion euros, managing 5 open funds and holding assets under management worth 25 billion euros. With over 400 total investments and an active portfolio of nearly 50 companies, Nordic Capital has a history of uncovering and placing investments in pioneering, growth-oriented companies across various industries, including information technology. Furthermore, Nordic Capital is dedicated to investing in companies that proactively address global challenges, contribute to building a prosperous society for all, and promote transformative sustainable change.
One of Nordic Capital’s remarkable investments in the IT sector was back in 2012 when it successfully completed a leveraged buyout (LBO) of Itivity Group, a Dutch software and IT services company, valued at 228 million euros. Over the course of nine years, Nordic Capital played a pivotal role in Itivity Group’s growth journey by facilitating the expansion of its product portfolio, customer base, and market position. The result was an outstanding achievement as Itivity Group was eventually sold for a staggering 2.14 billion euros in May 2021, realizing major profits to Nordic Capital’s investors. Besides Itivity Group, the Swedish private equity firm invested in other influential companies, such as Lindorff Group or Bank Norwegian.
Nordic Capital is renowned for its investment approach, which centers on long-term growth and value creation. The firm has established itself as a trusted partner for visionary company leaders who aspire to expand their businesses. Boasting a track record of over 110 successful exits, Nordic Capital has earned a sterling reputation for generating impressive returns for its discerning investors.
- 7. Cinven
Dry Powder: 15.35 billion EUR
HQ: London, UK
Web: https://www.cinven.com/
Cinven, a prominent global private equity firm with an impressive dry powder of 15.35 billion euros, manages seven open funds and oversees assets under management worth more than 30 billion euros. With a robust performance record of identifying and investing in progressive, expansion-minded companies across various sectors, including information technology, Cinven has established itself as a leader in the industry. One of the firm’s current funds has been named a Real Deals ‘Future 40 ESG Innovator’ which underscores Cinven’s special focus on making positive economic, social, and governance impacts through their investments.
Cinven’s extraordinary expertise in the tech sector is proved by several notable investments. One of these was the leveraged buyout of CPA Global, a leading intellectual property management company based in the United Kingdom, valued at 1.14 billion euros in 2012. Under Cinven’s guidance, CPA Global experienced major growth over the course of five years, showcasing Cinven’s ability to create value. In 2017, Cinven successfully exited CPA Global for 2.69 billion. It is a great example of the company’s rich history, which includes around 170 successful exits. Due to this fact, the company has a strong reputation for garnering considerable profits for its investors.
- 6. Intermediate Capital Group
Dry Powder: 22.08 billion EUR
HQ: London, UK
Intermediate Capital Group (ICG) is a highly regarded private equity firm that specializes in investment management and corporate finance. With a significant dry powder of 22.08 billion euros at its disposal, the firm expertly manages 34 open funds and boasts an active portfolio of 70 companies and a staggering 70 billion euros in assets under management. The London-based firm is committed to fostering a future workforce that prioritizes diversity as a core value. In ICG’s 2020 graduate programme, an impressive 63% of participants were female, while 37% identified as belonging to an ethnic minority group. Additionally, the firm actively supports young individuals from underserved communities through various initiatives and programs.
ICG has an exemplary history of prosperous investments spanning various industries, including the lucrative IT sector. In September 2017, the firm co-invested a substantial 1.53 billion euros in Norwegian Visma Group, a leading provider of cutting-edge business software and cloud services, in a secondary transaction. This investment underscores ICG’s astute acumen in identifying companies with innovative products and services.
Furthermore, ICG has a rich history of successful exits, with over 300 notable exits to its name, including the profitable exit of Poland-based media and communication service provider Aster City Cable in September 2011. This remarkable expertise emphasizes the firm’s commitment to delivering outstanding returns for its esteemed investors. ICG’s noteworthy investment in Visma Group, combined with its extensive experience and a history of lucrative exits, positions it as a compelling option for companies seeking exceptional growth and expansion opportunities.
- 5. CVC Capital Partners
Dry Powder: 23.55 billion EUR
HQ: Luxembourg, Luxembourg
Web: https://www.cvc.com/
Renowned for its exceptional reputation and formidable prowess, CVC Capital Partners stands as a distinguished private equity firm with a noteworthy dry powder of 23.55 billion euros dispersed among its seven active funds. The company prides themselves on integrating ESG within their operations and investment processes. With the aim of producing sustainable value for their portfolio companies and investors, the firm had near 1,000 total investments before, and currently manages over 150 thriving organizations that collectively amass a mammoth 137 billion euros in assets under management.
The firm’s unparalleled expertise in the ever-evolving realm of information technology renders it an irresistible choice for visionary leaders in search of investment opportunities. A prime example of CVC Capital Partners’ keen acumen in the IT sector is its strategic investment in Avast Software, a pioneering provider of PC security software based in the Czech Republic, a move made in March 2014. The Luxembourg-based company further proved its commitment to nurturing innovation and fostering growth in the digital industry, by co-investing with Summit Partners in AVG Technologies, a Czech cybersecurity firm, through a public-to-private leveraged buyout (LBO) transaction valued at 1.25 billion euros in September 2016. Both deals showcased the firm’s ability to identify and capitalize on the potential of promising tech companies poised for exponential growth.
Notably, the firm’s track record extends beyond investments, as exemplified by its successful exit from its investment in Formula One in July 2017, a company it had acquired in 2006. This exit marked a triumphant return for CVC Capital Partners and served as a testament to its ability to yield considerable profits for its esteemed investors.
- 4. Permira
Dry Powder: 25.06 billion EUR
HQ: London, UK
With over 500 total investments and 75 billion euros in assets under management, Permira is a renowned private equity firm recognized worldwide for its specialized knowledge and proficiency in investing in companies. Permira always looks for the opportunity to partner with disruptive technology, tech-enabled and category-creating organizations led by visionary management teams. Boasting a dry powder of 25.06 billion euros and managing 17 open funds further strengthens Permira’s reputation in the IT industry and makes the company a preferred choice for tech firms on the verge of transactions.
In a public-to-private leveraged buyout (LBO) deal worth 5.47 billion euros, Permira co-invested with Canada Pension Plan in Mimecast, a London-based leading company specializing in email security and cyber resilience. This investment demonstrates Permira’s ability to identify innovative tech firms. Besides its notable impressive investment performance, Permira has a strong history of exits, as the company has done more than 160 such transactions successfully. This expertise spotlights the firm’s commitment to generating significant returns for its investors and many well-known past and present portfolio companies, such as McAfee, Zendesk, or Hugo Boss further solidify Permira’s reputation as a premier option for tech companies in search of an investor.
- 3. Hg
Dry Powder: 25.28 billion EUR
HQ: London, UK
Hg is widely recognized as a distinguished private equity firm with a formidable track record of investing in companies poised for growth. Boasting a substantial war chest of 25.28 billion euros in unallocated capital, the firm adeptly manages a diverse portfolio of 33 open funds. Hg’s dynamic portfolio presently comprises 53 companies, collectively valued at approximately 50 billion euros in assets under management. The London-based private equity firm has a core expertise in funding and supporting businesses operating in the software and technology-enabled sectors, including software-as-a-service (SaaS), cloud computing, cybersecurity, fintech, and healthcare technology.
This deep domain knowledge and experience in the sector is showcased in Hg’s history of transactions. In March 2019, the firm invested in Transporeon, a leading cloud-based logistics platform located in Germany, through a leveraged buyout worth 706 million euros. Hg recently exited its investment in Transporeon for 1.88 billion euros, meaning that the company has now made more than 120 successful exits. Additionally, Hg has made illustrious investments in companies such as The Access Group and Visma Group, both in the IT sector. These achievements exemplify the firm’s ability to identify innovative and growth-oriented companies and provide them with support to realize their potential.
EQT
- 2. EQT
Dry Powder: 31.42 billion EUR
HQ: Stockholm, Sweden
EQT, a premier private equity firm with a global reach, is an excellent choice for tech companies seeking capital to propel their growth. Through 31 open funds the firm has a significant dry powder of 31.42 billion euros, which it uses to fund growth-oriented organizations across various industries. The Stockholm-based company is dedicated to sustainable investment and focuses on making positive environmental, social, and governance (ESG) impacts through their capital deployment. As of now EQT has close to 150 active portfolio companies, amounting to a substantial 114 billion euros in assets under management.
EQT’s investment in foodtech company SNFL Group in March 2022, a co-investment with AM FRESH Group and Paine Schwartz Partners, saw the firm lead a 1.6 billion euros growth round in the Spanish company. Two months later, EQT also made a successful exit from Wolt, a Finnish food delivery startup, after it had acquired the company in 2019. This exit emphasizes EQT’s capacity to enhance the value of its portfolio firms, in addition to its ability to deliver profitable outcomes to its stakeholders. A deep understanding of the IT industry and a proven track record of successful investments and exits means Swedish EQT is a top choice for either a buyout or a growth round.
- 1. Ardian
Dry Powder: 39.51 billion EUR
HQ: Paris, France
Ardian, one of the world’s largest private equity firms, presents a compelling choice for companies pursuing growth. With an impressive dry powder of 39.51 billion euros, the company’s investment strategy is to provide flexible capital to organizations in various industries, including IT. The firm had approximately 1,300 total investments in the past and manages 31 open funds currently. Ardian has a diverse active portfolio of around 200 companies, amounting to a staggering 130 billion euros in assets under management.
Ardian’s investments in Taxually, the Hungarian start-up providing tax reporting solutions and Poznan-based Allegro showcase the firm’s interest in the technology sector – Ardian co-invested in the Polish and European e-commerce market leader’s 3.1 billion euros buyout in January 2017, which is one of the largest transactions in the industry in the CEE region. Ardian has also made notable investments in other tech companies such as TDF Group in France or WorldPay in London.
A successful exit from Vivacom in November 2012 highlights Ardian’s ability to create value and generate substantial returns for their investors. Vivacom, a leading Bulgarian telecom operator, was sold for 1.2 billion euros, which was a significant achievement for the French private equity firm. With their knowledge and capabilities, Ardian is equipped to provide business guidance and agile capital to fund the expansion of established companies, offering the necessary support for growth.
And +1, being the most active technology PE investor in the CEE region:
- +1: MCI
Dry Powder: 51.67 million EUR
HQ: Warsaw, Poland
Web: https://mci.pl/en
As the most active technology investor in the CEE region, MCI Capital rightfully earns a place on this illustrious list. The prominent Polish private equity firm boasts a distinguished track record of over two decades in unlocking substantial value from IT investments, with a keen focus on the flourishing fintech, e-commerce, and digital media sectors (btw, we also supported our Client in an M&A deal with it). With a robust financial position, including significant dry powder of 51.67 million euros, and managing assets under management (AUM) totalling 576 million euros, MCI Capital is a formidable player in the industry.
Setting them apart is their proactive and hands-on approach with portfolio companies, characterized by strategic and operational support, leveraging their extensive network of industry contacts and resources to drive value creation initiatives. Their commitment to responsible investing is evident in their meticulous integration of sustainability and ethical considerations into their investment decision-making process, aligning with the ever-growing demand for responsible and ethical investment practices in the technology sector.
Noteworthy exits from MCI Capital’s portfolio include prominent companies such as Zettle by PayPal, Lifebrain, and Polish Allegro, underscoring their ability to deliver successful outcomes for their investments. A prime example of their expertise is their 2017 acquisition of Hungary-based Netrisk through a leveraged buyout (LBO) worth 56.5 million euros, followed by a successful partial exit just three years later, yielding a remarkable 55 million euros and retaining an approximate 24% share in the company. The Warsaw-based private equity firm managed another impressive transaction successfully in December 2018, by acquiring Polish tech company IAI SA through a public-to-private LBO. MCI Capital’s extensive experience, hands-on approach, commitment to responsible investing, and robust financial position exemplify their status as a reliable partner for technology entrepreneurs in Central and Eastern Europe (btw, we also made deal with them).
Private equity – active past years, bright future
The private equity market has a promising future, as demonstrated by its remarkable activity in 2021 and 2022. Record-breaking transaction values and volumes, driven by ample dry powder available to firms, highlight the industry’s strength and potential.
PE players have been actively utilizing their dry powder to expand their portfolio companies and drive M&A market activity, underscoring their ability to capitalize on investment opportunities. The diversification across sectors, such as healthcare, technology, energy, and real estate, further strengthens the market’s resilience and potential for sustained growth. Overall, the private equity industry is poised for a bright future, with PE firms driving M&A market activity and contributing to the industry’s ongoing success.
Absolvo’s Partner, Iván Gyurácz Németh joined HVCA Board
Iván’s role at HVCA will further strengthen the connection between the CEE region’s tech sector and the venture capital industry, fully aligning with HVCA’s mission to elevate professional standards and drive private equity growth across Hungary and Central Eastern Europe.
He thus joins the board alongside long-established investors such as Euroventures and leaders from the most active VC/PE companies, including Lead Ventures and Portfolion, working together to shape the market.
Ivan’s experience in the regional venture capital landscape, paired with his expertise in internationalization, business development, and B2B marketing / sales strategies, will be vital in bridging the gap between tech entrepreneurs and strategic investors, fostering even stronger collaboration and innovation while advancing HVCA’s objectives.
