Ex-Insight, Luminate execs form Nexa Equity to target small market tech

A group of tech investors have come together and formed Nexa Equity, which is raising its debut fund for investments in lower-mid-market tech businesses, sources told Buyouts.

Nexa Equity Fund I is in the market now, targeting around $200 million to $250 million, one of the sources said. A spokesperson for Nexa declined to comment about fundraising.

The firm is one among a handful of first-timers testing the private equity fundraising markets that were largely shut to newcomers in the health crisis, but that have more recently opened back up as LPs warm to forming new relationships again.

Vlad Besprozvany launched Nexa, along with a group of professionals from Insight Partners. Besprozvany worked at Insight Partners from 2016 to 2019, leading the buyout team with a focus on investments in software and fintech. More recently he worked as a managing director at Greater Sum Ventures, where he led sourcing and made software-focused platform investments and add-ons.

He is joined by Shelley Perry, growth partner, who most recently worked as an operating partner at Insight Partners from 2016 to 2020; Todd Cramer, principal, who worked at Insight Partners from 2016 to 2018, according to his LinkedIn profile, and most recently was a vice president in strategy and growth at Ubiquiti; and Joey Maloney, principal, who worked as a vice president at Luminate Capital Partners from 2017 to earlier this year, according to his LinkedIn profile.

Nexa Equity will focus on founder-led software and fintech companies with revenues from $5 million to $20 million across application software, healthcare IT and electronic payments enablement. Nexa would look to be the first institutional capital invested in businesses that are break-even to slightly profitable.

Nexa is looking to “fill that void created when most mid-market software firms that used to play in that space aged out,” one of the sources said. Target companies would be not quite growing fast enough for venture capital inventors, but also not big enough for some of the mid-market tech private equity firms, the source said.

Fundraising by emerging managers dropped last year, representing about 11.7 percent of private equity raised globally, a decline from about 18 percent the previous year, according to data from Pitchbook.

Other first-timers include Guidepost Growth Equity, targeting $400 million for its debut; Princeton Equity Group, which earlier this month closed its debut fund on $350 million; and Formentera Partners, targeting $400 million for its debut energy fund. Check out Buyouts‘ archive of first-time funds and emerging manager fundraising here.