JMI Equity on Monday closed a new fund with commitments of $2.4 billion, its biggest since the firm’s inception in 1992, according to Crunchbase data. JMI Equity Fund XI, L.P., together with JMI XI Executive Fund, L.P., was oversubscribed, with demand exceeding the original $2 billion target, the Baltimore-based firm said. So far, the firm has won capital commitments of over $8 billion.
“We are grateful for the support of our longstanding investors and excited to welcome an array of new limited partners from around the globe,” said managing general partner Peter Arrowsmith. “We look forward to continuing to partner with the next generation of software company founders, entrepreneurs, and management teams to help them navigate this evolving landscape and create businesses of enduring value.” Proskauer Rose LLP served as legal counsel in the formation of JMI XI.
Stellar Leadership
JMI is co-led by managing general partners Arrowsmith, who joined the firm in 1996, and co-founder Harry Gruner. Gruner, along with Charlie Noell and John Moores, founded the firm with the strategy of investing in high-growth B2B software companies. Noell is now a businessman and racehorse owner. Both Gruner and Noell previously worked at the investment bank Alex.Brown. Moores is the founder and former CEO of BMC Software.
Gruner has served on the boards of over 40 software and information businesses, including seven public companies, and several nonprofit organizations. He also worked in marketing at computer-aided-design software developer Sigma Design and in the technology investment banking group at Blyth Eastman Paine Webber. Gruner received a BA in History from Yale University and an MBA from the Harvard Business School.
Arrowsmith served as an associate at AEA Investors and a business analyst at McKinsey & Company before joining JMI in 1996. He is currently a director of Canto, SafetyChain, Seismic, Vena Solutions, and Yello, and a board observer at Ignition and OpenSesame.
Landmark DoubleClick Deal
The new fund, which has already made three portfolio investments, will make both minority and majority shareholder investments ranging from $25 million to $250 million. JMI XI has invested in Businessolver, Visiting Media and Unanet. The fund will focus primarily on North American companies, likely providing many with their first institutional capital.
With offices in Baltimore, Washington, D.C., and San Diego, Calif., JMI has 30 investment professionals, of whom 11 are general partners. Since inception, the growth equity firm has invested in over 180 businesses in North America and Europe. It has made 115 exits, and completed 19 initial public offerings.
Google’s $3.1 billion acquisition of DoubleClick in 2007 is widely considered a landmark deal for the firm. The deal helped JMI more than double its investment in two years, having taken the digital advertising firm private in 2005 for $1.1 billion. Today, the firm’s portfolio of industry-leading cloud software companies represents $8 billion in combined revenue, $65 billion in aggregate enterprise value, and over 34,000 jobs.
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Recent Momentum
Over the past three years, JMI Equity said it has invested in more than 30 cloud software companies and generated over $3.5 billion in realizations. Its portfolio companies
remain “well-positioned to navigate the dynamic economic environment,” the firm said. JMI Equity has set a hectic deal-making pace in recent years, in line with its fund-raising. Its recent portfolio investments included a $100 million deal in OnBoard, a cloud-based board management solution; Condeco, a maker of workspace scheduling software; Service Trade, a software platform for commercial service contractors. The firm’s recent venture investments include SOCi, Visiting Media, Eptura, Vantaca, Performio and Whistic.
