Riverwood Capital, a growth investment firm focused on mid-size technology companies, has successfully closed a new fund, raising $1.8 billion in capital. The latest funding round comes after the firm raised $1.4 billion in 2020, bringing its total capital commitments to $3.2 billion.
Key Takeaway
Riverwood Capital has successfully closed a
.8 billion fund, bringing its total capital commitments to $3.2 billion. The firm, which primarily invests in high-growth mid-size technology companies, plans to use the new capital for new investments and selectively support its existing portfolio companies. Riverwood Capital sees significant growth opportunities in Latin America, where it has achieved an average annual revenue growth rate of over 50% with its portfolio companies.
Fueling Growth and Expansion
The primary objective of Riverwood Capital is to identify and invest in high-growth technology companies that are either profitable or have positive unit economics. With the new capital, the firm plans to primarily focus on making new investments in promising companies.
According to Jeff Parks, co-founder and managing partner of Riverwood Capital, the firm does not reserve capital upfront in a fund for follow-on investments. However, they do plan to selectively invest more capital in their existing portfolio companies to accelerate organic growth, explore M&A opportunities, or provide liquidity to shareholders.
Investment Strategy
Riverwood Capital typically invests check sizes ranging from $25 million to $100 million per company. Each fund cycle targets 20 to 30 companies for investment. The firm has already backed several companies from its latest fund, including SpyCloud, Hyperproof, One Model, and Logcomex.
Since its inception in 2008, Riverwood Capital has made more than 75 investments and has seen over 40 exits through acquisitions, sponsor buyouts, and IPOs. Some notable portfolio companies include Billtrust, Globant, GoPro, Nextdoor, and Vacasa.
While Riverwood invests globally, it primarily focuses on companies located in North America and Latin America. The majority of its investments are in U.S.-based companies, but it also sees significant growth opportunities in Latin America.
Growing Opportunities in Latin America
According to Francisco Alvarez-Demalde, co-founder and managing partner of Riverwood Capital, the technology opportunities in Latin America have been expanding consistently over the past 15 years. The firm’s portfolio companies in the region have experienced an average annual revenue growth rate of over 50% during that period.
Despite recent volatility in capital flows and investor interest, Alvarez-Demalde believes that the opportunity to build and expand technology businesses in Latin America has never been greater. Riverwood Capital intends to continue supporting the international expansion of its portfolio companies, including to Europe, Asia, and other regions.
