Tag: ESW

04
Oct
2020
Posted in software

Small software companies find a home with ESW Capital

ESW, short for enterprise software, is controlled by Texas billionaire Joseph Liemandt. Over the past couple of decades, the firm has bought more than 100 companies in deal sizes ranging from less than a million dollars to at least $460 million. ESW aims for at least 30 more acquisitions next year as the big companies that are its target customers rely ever more heavily on technology to get through the coronavirus pandemic.

Austin, Texas-based ESW has the infrastructure—managers, lawyers, recruiters, developers and sales professionals—that small companies struggle to afford. It also has the cash to allow early investors and founders to move to the next creative challenge.

Source: Court documents

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Source: Court documents

Andrew Einhorn co-founded media-intelligence company Synoptos in 2014 and sold the Virginia-based provider of real-time reputation-management software to ESW last year for an undisclosed sum. Synoptos had been growing steadily but its founders wanted it to expand faster, either by raising venture capital in exchange for partial ownership or by selling the company outright to a large company like ESW, he said.

ESW, Mr. Einhorn said, offered “founder-friendly” terms and, important for him, allowed Synoptos customers to tap into other software products as part of the subscription service. He is now chief executive of LevelFields Inc., a financial-technology startup that hasn’t come to market yet, and says he has no regrets about selling to ESW.

Instead of buying and selling companies the way private-equity firms do, ESW operates the software businesses it buys, increasingly through its Aurea Inc. unit.

Source: Court documents

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Source: Court documents

Technology created by the small businesses ESW has bought is often collected in a library of software tools for sales and marketing, collaboration and integration, and other business essentials. ESW sells access to the collected offerings under a subscription model.

The deal