Resurge Growth Partners announced the launch of a new “venture equity” vehicle designed to bridge the critical gap between venture capital and private equity for high-potential European and Israeli scaleups. Resurge will invest over €120 million via the vehicle over the next three years, with nearly half of the capital already committed from the founding GPs and a leading family office.
As one of Europe’s first venture equity offerings, the model will see it acquire significant stakes in promising companies that have outgrown VC and are looking for a new way to grow.
Resurge was founded by Oren Peleg, former Managing Director of Oaktree Capital Management and former CEO of international gym chain Fitness First. He is joined by co-founder Eyal Malinger, former Partner at Beringea and former Vice President at Oaktree Capital.
Resurge’s mission is to partner with “Venture Graduates” – high-potential companies that have outgrown the venture capital model but are not yet mature enough for traditional private equity. Through their venture equity model, Resurge will provide the capital, operational expertise and time needed to transition a company away from the VC funding model and move them to a path of profitable, sustainable growth.
The new vehicle will aim to invest at least €120 million into high-potential companies over the next three years. Nearly half of this capital has already been secured via GP commitments and the backing of a leading family office. The remaining funds are sourced from a select group of family offices and high-net worth individuals who are committing capital on a deal-specific basis. With this foundation, Resurge is well-positioned to onboard its first portfolio companies by the end of the year.
Oren Peleg, co-founder of Resurge, commented: “There’s a huge gulf between the types of companies a VC will back and those who are ready for private equity. Too many promising businesses are falling into this gap – founders and CEOs running businesses with great potential, generating healthy revenues, but their scale-rate, TAM, or situation don’t fit the blueprint and criteria VCs or PE firms are looking for. The market isn’t currently serving these ‘venture graduates’ and they are hitting a wall. That’s where the concept of venture equity comes in. We take leading positions in these companies and then dedicate a huge amount of time and energy into unlocking their potential, with the goal of becoming profitable and self-sustaining. Our approach gets them off the VC fundraising merry-go-round and onto solid ground.”
Resurge acquires leading stakes in UK, European, or Israeli companies generating €8M+ in revenue through buyouts, recapitalizations, or strategic partnerships with existing investors and lenders. Resurge will inject capital and resources to assist its portfolio companies and get them on a clear path to sustained profitability. The strategy is sector-agnostic, but will focus on tech and tech-enabled businesses with an established product-market fit.
The approach provides founders with an opportunity to unlock value from their businesses at an early stage, clean up their cap table, free them from an endless cycle of fundraising, and transition to a longer-term, profit-focused growth strategy that works for the company and its team.
Eyal Malinger, co-founder at Resurge, commented: “When the market turns bearish, many high-potential companies find themselves stranded, unable to secure the funding they need. Conversely, in times of abundant capital, founders often end up with a convoluted cap table that hinders long-term success. At Resurge, we partner with ‘good companies who have the wrong cap table’; businesses with strong fundamentals but misaligned investor base or ones with an operational model that no longer appeals to existing investors. There’s huge potential here, both for the companies and the investors willing to back them in the right way.”
On the firm’s AI-led approach, Oren Peleg added: “Having helped build two private equity franchises in the past, I’ve seen first-hand how technology transforms businesses. The availability of advanced AI tools is allowing Resurge to operate at a level of productivity and insight that simply wasn’t possible before. These tools help us pinpoint opportunities faster, make smarter decisions, and unlock value in ways that were previously unimaginable. This enables us to dedicate much more time and far more resources to helping our portfolio companies.”
Read the orginal article: https://www.eu-startups.com/2024/10/london-based-resurge-growth-partners-launches-e120-million-venture-equity-vehicle-to-back-tech-scale-ups/
