Luminate looks to less software-reliant markets for deal flow

Luminate Capital, an emerging tech-focused shop that just raised its second fund, is focused on finding software opportunities in less tech-savvy markets.

For example, the firm said Jan. 10 it made a growth investment in LiquidFrameworks, which makes software for the oil and gas industry.

And in December, the firm invested in AutoQuotes, a software platform connecting foodservice equipment manufacturers, suppliers and their customers to market.

The firm did not disclose financial details of the transactions.

Luminate is exploring software opportunities in financial services, healthcare, oil and gas and other markets, Sanjay Palakshappa, partner at Luminate, told Buyouts.

“We believe the entire back office at all large enterprises, regardless of sector, could use more automation,” Palakshappa said.

Luminate purchased majority control of LiquidFrameworks from Houston Ventures, a VC firm focused on energy companies solving operational issues. Nearly half of Luminate’s deals are in VC-backed businesses, Palakshappa said.

“Just as private equity, venture capital-backed firms add processes, add capital that companies can use to develop their products more quickly, and can help companies back their deals,” Palakshappa said.

The size of the LiquidFrameworks deal was not disclosed. The investment came out of Luminate’s recently closed $425 million Fund II.

Luminate typically makes six to eight deals from a fund, according to Palakshappa. AutoQuotes was the first deal from Fund II and LiquidFrameworks was the second.

As part of the deal, Luminate’s Hollie Haynes, Mark Pierce and Palakshappa will join the LiquidFrameworks board.

Stephen Day, managing director of Navidad, an Austin-based investment bank, advised LiquidFrameworks with the transaction.

Action Item: Contact Luminate Capital at info@luminatecapital.com.