ICONIQ invests in Francisco Partners’ QGenda, surpassing $1bn valuation

Francisco will remain the healthcare software company's majority investor after concluding one of few non-distressed auctions to launch in the middle of the pandemic.

ICONIQ Capital, known for its ties to tech billionaires including Facebook CEO Mark Zuckerburg, has joined Francisco Partners as an investor in QGenda, PE Hub has learned. 

The deal values QGenda, a workforce-management company specializing in healthcare, at $1.05 billion, sources familiar with the transaction said. 

Speaking to investors’ pent up demand to put money to work, the transaction concludes one of few processes – for an asset that was neither opportunistic nor distressed – to formally kick off in the middle of the pandemic. In contrast, many attractive businesses the likes of QGenda continue to sit on the sidelines, waiting to grasp more visibility around the overall impact of covid-19.

PE Hub initially reported in May that Francisco Partners was evaluating the sale of QGenda, having engaged Evercore for financial advice. Strategics were excluded from the process, which targeted a minority deal and encompassed only about five sponsors, sources said.  

Francisco Partners, which backed QGenda in February 2016, will remain the company’s majority investor, the people said. QGenda’s existing management team, led by CEO Greg Benoit, will remain in place, the sources said. 

ICONIQ Capital’s exact ownership position is unclear, but the firm typically takes equity stakes in the 20 percent to 30 percent range, some of the people said.

The direct investment arm of ICONIQ focuses on technology growth equity, digital infrastructure and real estate. ICONIQ is known for backing entrepreneurs, with recent investments in companies including Snowflake, Netskope, Zinier, HighRadius, among several others. 

The capital injection will provide QGenda with additional wherewithal to execute potential acquisitions in adjacencies, as well as fuel product development and international expansion, sources said. QGenda has already shown a healthy appetite for M&A, adding OpenTempo and Tangier Software in 2019 and 2017, respectively.

QGenda also has significant space to gain share domestically, with only about 20 percent penetration in the US, one source noted.

QGenda, based in Atlanta, provides workforce management software to more than 3,000 customers across more than 30 medical specialties, academic medical centers, management services organizations and hospitals and health systems. 

The software-as-a-service provider helps doctor groups and their staff with scheduling processes, time and attendance, compensation management, as well as offers labor analytics. 

The transaction underscores the increasing relevance of workforce management in healthcare. While a growing area pre-covid, those in the business of improving productivity and communication have performed best across healthcare technology since the downturn hit, sources said.

In the midst of coronavirus, QGenda offers customers a central-demand station for deploying hospital resources.

QGenda, Francisco Partners and Evercore declined to comment. ICONIQ didn’t return requests for comment.

Action Item: Check out Francisco Partners’ latest Form ADV