Silversmith acquires CRMfusion to create sales-data platform Validity

Silversmith Capital Partners created a sales and marketing technology platform called Validity, which it plans to build through acquisitions and global expansion, Managing Partner Jim Quagliaroli told Buyouts.

The firm bought its first company for Validity, acquiring CRMfusion, a provider of software tools for Salesforce.com customers. The deal was out of Silversmith Capital Partners I; Fund II closed at the hard cap of $670 million in January. Quagliaroli told Buyouts that add-ons for the platform “would be funded by capital that Silversmith has already reserved and/or new debt.”

The initial investment was “right around the midpoint” of the firm’s $25 million to $75 million range for equity checks, Quagliaroli said, making it “very much a fairway deal” for the Boston growth equity firm.

CRMfusion was founded in 2004. “Fundamentally, this is an application that’s making your data more accurate,” Quagliaroli said, for instance by eliminating duplicate entries. Customers include Google, LinkedIn, Microsoft and Kaiser Permanente.

The company was founder-led and profitable, in keeping with Silversmith’s investment profile. Founder Glenn Wilson is now CTO of Validity and sits on the board alongside Quagliaroli, Silversmith Principal Sri Rao, angel investor and Cybereason CMO Mike Volpe, and Chairman and CEO Mark Briggs, one of Silversmith’s early senior advisers.

Quagliaroli said Silversmith has a three-pronged plan for Validity: significant investment in sales and marketing, global expansion, and inorganic growth.

The new brand is intended to facilitate “a more aggressive go-to-market strategy,” he explained. “We view this as a global opportunity, and I think our investments will reflect that.” Based in Boston, the company has offices in Toronto, Tampa and London, and Silversmith intends to expand outside North America.

“Given Mark [Briggs]’s background and the senior team, we do envision making further acquisitions around the data compliance and data integrity markets,” he added.

The investment was part of Silversmith’s direct origination program. Sales and marketing technology is a multibillion-dollar growth market and “an area that we’ve done a lot of work in [and] we care about,” Quagliaroli said. “We see a rapidly increasing number of SaaS and data-centric platforms like Validity which are offering differentiated applications.

“Silversmith has a long track record investing in sales and marketing software platforms, including numerous Fund I investments such as ActiveCampaign, Impact and RedAwning Group.”

Action Item: For more on Validity, visit https://www.validity.com.

Silversmith Capital Partners Managing Partner Jim Quagliaroli. Photo courtesy of the firm