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Hg Capital takes minority stake in Silverfin

Hg Capital, a leading private equity investor in Europe’s accounting software and services sector, has added Belgian practice intelligence specialist Silverfin to its portfolio.

24th Jun 2020
Editor in Chief (interim) AccountingWEB
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Silverfin co-founders Tim Vandecasteele (left) and Joris Van Der Gucht

According to tech investment monitor Crunchbase, the funding round raised an extra $30m for Silverfin, though the valuation on which it was based was not disclosed.

As a result of this injection, Hg has taken a stake alongside the Silverfin co-founders, who remain majority owners, and existing investors Index Ventures and SmartFin Ventures.

According to its website, Hg’s objective is maximise organic expansion of software and services companies in high growth markets, often by “rolling up” fragmented sectors. Silverfin is Hg’s 14th investment in the accountancy market in the last 15 years, with a total value of €1.8bn.

The Hg accountancy portfolio includes the rapidly expanding Baldwins practice empire, part of IRIS, BrightPay, Access Group, Visma, Sovos and TeamSolution.

Winner of the 2019 Accounting Excellence Award for software innovation, Silverfin is a cloud-based platform that aggregates real-time financial data and makes it available to internal practice systems for financial reporting, analysis and planning.

Hg Capital partner Joris Van Gool said Silverfin had been on the investor’s radar for several years. “Silverfin’s focus on cloud technology, automation, data analytics and serving the specific needs of accountancy firms as they accelerate their digital transformation is all perfectly aligned to the opportunities we see in this sector right now,” he said.

Accelerate product development

Silverfin co-founder Joris Van Der Gucht said from the developer’s point of view: “We want to bring the benefits of Silverfin to more customers internationally and develop the platform to have an even greater impact on their business transformation through technology.”

With its combined international experience of accounting and technology, Hg made an ideal partner for Silverfin’s next growth phase, he added. “The investment… will help us to accelerate our product development, support our growth plans and provide us with invaluable insight into future developments in accounting we can capitalise on.”

The dislocations brought on by the Covid-19 virus intensified demand for Silverfin’s application, Van Der Gucht said. The cloud-based data warehouse has made it easier for accounting practices to work remotely and put together core reports.

“But we've also made it easier to give the advice their businesses really need, particularly now, like financial modelling, risk monitoring, benchmarking and scenario planning,” he said.

Synergies with IRIS and Baldwins?

Probably the most interesting aspect of Hg’s latest move is the extent to which it will stimulate crossovers and collaboration between different companies in its portfolio. IRIS, for example, launched an open integration platform in 2018 that could benefit larger firms linking Silverfin’s sophisticated working papers, workflow and analysis tools to the IRIS Accountants Suite of tax and practice applications.

And don’t discount the Baldwins connection. Several member firms of the Baldwins group including Blick Rothenberg and the original Baldwins are already Silverfin users. The UK accounting group has its own online business processing portal, CoZone, developed by its Cogital sibling.

Could some of the “invaluable insight into future developments in accounting” Silverfin’s Van Der Gucht mentioned as a motive for the deal come from frontline UK accountants wanting more tailored enhancements to their reporting and analysis tools?

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