GrowthCurve’s Fund I nabs $1bn-plus in brutal market for first-timers

GrowthCurve Capital secured $1.1 billion for an inaugural buyout offering, despite frigid fundraising conditions for emerging managers.

The haul for GrowthCurve Capital Partners I, launched last year with a target of “north of” $1 billion, Buyouts reported, was disclosed by the firm in Form D documents.

It is not known if Fund I is nearing a close or whether GrowthCurve intends to stay in the market. The firm declined to comment.

Stifel, CapLink Securities and Resonance Capital are the placement agents.

Emerging managers are facing a bone-chilling fundraising environment. Many LPs, a large share of them overallocated to private equity, are compelled to provide the little money they have to re-ups with incumbent GPs. They are for this reason often neglecting new relationships, even pedigreed teams with attractive strategies.

The 2022 Buyouts Emerging Manager Survey, conducted by Gen II Fund Services, underscored the challenges. It found almost two-thirds of respondents agreed or strongly agreed that LPs are hesitant about backing first-timers. A mere 15 percent disagreed.

GrowthCurve, founded in 2020 by CEO Sumit Rajpal, ex-global co-head of Goldman Sachs’ merchant banking division, appears to be beating the odds. As part of capital raising, it last month announced signing up the high-profile New York State Common Retirement Fund.

GrowthCurve was set up with an operationally-focused strategy of making control investments in growth-oriented mid-market businesses in financial and information services, healthcare and technology sectors. Preferred deals have an enterprise value of $500 million to $1 billion.

Targets are generally North American companies which have yet to adopt or fully leverage innovation, such as artificial intelligence and machine learning, with the help of the right mix of talent. The thesis is many owner-operators understand they need to digitally transform to grow and compete but lack an effective game plan.

Of particular interest are businesses sitting on extensive data sets. Making better use of this information and enhancing it will create fresh growth opportunities, such as access to new markets.

Fund I has already made three platform investments. The first, closed last December, was Mistplay, a play-to-earn and game discovery platform for mobile gamers. In the same month, GrowthCurve said it invested in Brightway Insurance, a personal lines-focused insurance franchisor.

The vehicle’s third investment, announced in April, was Revecore, a revenue integrity and complex claims solutions provider for health systems. The company is also backed by Riverside Partners.

Rajpal, who was with Goldman Sachs for two decades, today oversees a GrowthCurve team of more than 20.

Other senior members are Sanjay Swani, chief investment strategist and head of technology investing; Matthew Popper, head of financial and information services investing; and Vignesh Aier, head of healthcare investing. They were formerly with TailWind Capital, Goldman Sachs and New Mountain Capital, respectively.

GrowthCurve also has four functional executives to lead AI, data, analytics and machine learning, digital transformation and human capital. The most recent senior hire, Angela Geffre, came onboard in September as head of human capital from Sun Capital Partners.