Ex-Rembrandt GP Scott Irwin unveils Camber Partners, closes debut tech buyout fund

In a red-hot market for technology funds, Camber Partners wrapped up a first-time buyout offering earmarked for investments in the product-led growth software vertical.

The San Francisco emerging manager closed Camber Partners Fund I earlier this year, securing $100 million, managing partner Scott Irwin, a former Rembrandt Venture Partners general partner, told Buyouts.

Fund I was 80 percent backed by institutions, with additional participation from family offices, private equity GPs and software executives. It was not able to satisfy all investor demand, Irwin said, because of a decision to align the fund’s size with Camber’s strategy of backing a select number of tech opportunities.

A venture capital professional by training, Irwin founded Camber in April 2020 with a distinctive modus operandi for acquiring product-led growth software businesses. Key to the strategy is its provision of not only capital but “missing ingredients” like talent and data, he said.

Irwin worked for more than two decades at Rembrandt and El Dorado Ventures, leading or co-leading 35 investments in early-stage SaaS and software companies. At Rembrandt, his deals included cloud security startup Adallom, sold in 2015 to Microsoft, and sales CRM platform Pipedrive, a majority of which was sold last year to Vista Equity Partners.

Irwin’s VC experience taught him that the product-led growth model was only “done well” when a software business embodied crucial factors, such as seasoned operational talent that could run it at scale. This, he said, was the case for Pipedrive. Multiple others in the vertical, however, face “a shortage of talent and data science resources” that inhibits optimal expansion.

Operator-led strategy

To address the issue, Irwin designed Camber to be a buyout shop with an operator-led approach to investing.

Using a lean investment team led by Irwin, Camber makes control investments in B2B SaaS businesses with $3 million to $10 million in annual recurring revenue and that feature product-led growth models. Fund I will put together a curated portfolio of five to seven companies, typically deploying $10 million to $20 million to each.

Once in the portfolio, a business accesses an operating team of eight professionals with backgrounds at established tech brands, among them Datadog, Playdom, SolarWinds and When I Work. Operators lead value creation, helping the company scale faster through advice and hands-on support in areas like online marketing, sales execution and customer success.

Scaling-up is also expedited by team members, including Scott Ernst, vice president of data and engineering, who focus on building out business infrastructure and systems, in part by unlocking data. One tool, Camber’s data-driven solution Gemini, targets such essential capabilities as customer attribution and predictive customer help scores.

In adopting this method, Camber looks very much like “a Silicon Valley software management team” paired up with a fund “to build the portfolio,” Irwin said.

The entire team at present totals 10, including co-founder and partner Jason Hable. With Fund I’s closing, Camber is set to recruit additional members, including a vice president, investments.

Inaugural investments

Fund I has already done two platform deals, one of which has been disclosed. In the spring, it invested $8 million in the acquisition of Scout APM, a provider of application performance management software. As part of the deal, Scout APM entered the exception monitoring space by buying ExceptionTrap.

Scout APM, which “built a great product that spread by word-of-mouth,” is in many ways illustrative of the investments the fund aims to make, Irwin said. By partnering with Camber, it can achieve its full potential and become “a leader in the DevOps observability market.”

Camber uses data science to source “the right opportunities” on a global basis, Irwin said. Fund I’s initial portfolio is already international in scope, with Scout APM having its headquarters in Denver, Colorado, and the second company, in Europe.

Emerging managers like Camber are playing a role in vigorous tech-focused fundraising this year. In the North American market, some 363 vehicles collected more than $172 billion at the end of September, according to Buyouts’ data. That puts fundraising in sight of the record $194 billion raised in all of 2020.