Essex Bay Capital, a lower middle market investment firm, recently made its entrance to the market and soon after announced its first platform investment in Munetrix.
Essex Bay Co-founder Franklin Foster says the initial transaction closed roughly six months after the firm launched. Less than six months later, the firm closed its second platform investment in Divvy Engagement Solutions.
Munetrix is a SaaS performance analytics platform used by school districts and municipalities to make informed decisions related to financial information and student academic achievement. School districts and municipalities are using it in part to do forecasting and benchmarking their performance against local or national peers, and gain greater visibility into their data.
"We think the business has a lot of different growth opportunities to it, both organically and through acquisitions, which are two key components to how we think about overall growth strategy," Foster says. "It's a big market. It's a very fragmented market and a lot of room for growth."
As the first institutional capital in the business, Foster says the biggest lever to pull initially is building out the sales and marketing capabilities of the business — introducing a national sales force, building out the customer success team increasing the visibility of the brand. Getting there likely means pursuing acquisitions.
"That's core to my DNA from Audax, (Group) and Yash (Singh, co-founder) as well from his background, so we're going to pursue investing in adjacent companies that have complementary services or platforms or as a way to really diversify our customer base, expand geographically and so forth," he says. "So, definitely intend to be acquisitive, without a doubt."
When investing, Foster says he's looking for differentiated solutions or products, as well as a sustainable value proposition, a good management team — one that's like-minded in their approach to partnership and growth — as well as a market environment that's conducive to scaling significantly organically and through acquisitions.
"We really want to go into a situation saying, we're going to make this business five, six, seven times as large at exit as when we started," he says.
In Munetrix, the SaaS model lends itself to a sticky customer base and no major competitors that have high market share, among other things.
"When executed well, we think we got a lot of room to grow," he says.
Foster spoke at the Boston Smart Business Dealmakers Conference about launching Essex Bay Capital and the investments the company has made so far. Hit play to catch the full interview.
