Bain Capital Double Impact acquired a majority stake in Rural Sourcing, an outsourced digital technology and IT services company that aims to bring IT jobs to small and midsize cities in the U.S.
Rural Sourcing is the ninth investment out of Bain Capital Double Impact fund, which closed on $390 million in June 2017. The firm plans to make a few more investments out of the fund, Iain Ware, principal at Bain Capital Double Impact, told Buyouts.
Bain Capital became familiar with Rural Sourcing at a conference and developed a relationship over the next few months.
The company’s management team also invested for a minority stake in Rural Sourcing. The deal, which closed March 22, was proprietary and didn’t involve any financial advisers. Bank of Montreal provided debt financing for the transaction.
Bain’s impact fund focuses on investments in health and wellness, sustainability, education, and community building. The Rural Sourcing investment falls under that last category, Ware said.
Rural Sourcing “is creating high-quality tech jobs in cities where they wouldn’t otherwise exist,” he said.
As an example, a consumer company that wants to update its e-commerce website has to either outsource IT services to India or the Philippines or hire a software technologist from Silicon Valley, a more expensive option, Ware explained.
Clients nationwide are now able to use services of technicians from small and midsize cities like Mobile, Alabama, and Oklahoma City, Ware said.
Rural Sourcing hires talent from local colleges and coding boot camps and employs around 500 people. The company has been growing at a 30 percent rate annually for the past four years, a source familiar said.
Bain Capital Double Impact’s portfolio consists of a fast-casual vegan-restaurant chain, By Chloe; an in-home care provider for older adults, a dentistry business and a fitness center, among others.
Rural Sourcing is a second tech investment out of Bain Double Impact, Ware said. The firm is also invested in Penn Foster, an online education business that provides lower and middle-skilled workers with access to high-school, associate, and college classes and certificate programs.
“This allows [students] to do it online at their own pace at a much lower cost than other online services,” he said.
Bain Capital may launch its second Double Impact Fund later this year, sources told Buyouts.
Correction: A prior version of this story gave an incorrect number of employees at Rural Sourcing. The company employs around 500 people.
Action Item: Contact Rural Sourcing at 877-887-4774.