Apax Partners’ bet on CyberGrants underscores the growth in philanthropy software technology.
As a firm, Apax has evaluated software businesses involved in corporate social responsibility (CSR) and philanthropy for quite some time, searching for the best M&A platform in the market, Jason Wright, partner at Apax, told PE Hub.
In buying CyberGrants from Waud Capital, Apax believes it has done just that.
“The corporate grant writing function has become more and more important as companies have increased the volume of giving,” Wright said. “Grant function and grant making is quite complex and needs technology to facilitate that, and CyberGrants is the leader in that space.”
CyberGrants, headquartered in Andover, Massachusetts, provides Software-as-a-Service solutions for corporate philanthropy, including workplace giving, employee engagement and grants management. The company facilitates grant writing and helps connect large organizations to non-profits based on the cause they want to support.
PE Hub first reported that CyberGrants was up for sale in May. Sources then said the company generates $40 million in annual recurring revenue and $9 million in EBITDA.
Wright, who’s been personally involved in philanthropic cases as a board member of The Opportunity Network, a large charity organization based in New York, sees attractive tailwinds for CyberGrants. According to Wright, this past year has seen a boost in grants as the global pandemic and social justice issues increased the need for donations in the society.
“The donations went up because the need went up and everybody has become just laser focused on trying to give back to the communities that were in need and that’s obviously increasing the tailwind,” Wright said.
“Corporate employees are getting more involved in non-profits with their time and money. The CyberGrants technology allows them to participate, choose organizations and causes that they deem worthy, and make donations,” he added.
Historically, non-profits were not using much technology as tools like CyberGrants were not yet available. Now, companies turn to software applications like CyberGrants to streamline those processes, Wright said. This efficiency ultimately drives more giving back, he added.
“CyberGrants’ technology when used in the right way is increasing the amount of donations that benefit non-profits,” he said.
“Increasing that employee participation, increasing the amount of donations that are going towards non-profits, is fundamentally what CyberGrants does, and the company has been growing very nicely,” he said.
Apax plans to grow the company further by continuing heavy investment into the product, sales and marketing departments, and through M&A.
Wright also sees an opportunity to take the CyberGrants’ product to the mid- and upper-mid-market, where the company has yet to achieve the same level of penetration as it has with large corporations.