MyWebGrocer In The Bag, HGGC May Raise Fund II This Fall

  • Fundraising delayed after co-founder left
  • 13 platforms in debut fund
  • MyWebGrocer marks 28th deal

Sister web site PEHub reported last year that the firm delayed its expected fundraising in 2012 after co-founder and managing partner Robert Gay—a veteran of Bain Capital during the Mitt Romney yearswas leaving to work at the Church of Latter Day Saints. peHub estimated that the new fund would be about the same size as its debut fund, or $1.1 billion.

Gay, who worked at Bain Capital from 1989-2004, remains as a member of HGGC’s investment committee. Jon Huntsman, founder and chairman of chemical prouder Huntsman Corp, is listed on the web site as a co-founder and chairman of the debut fund.

Meantime, HGGC said June 11 it completed a growth equity investment in MyWebGrocer, a Vermont-based seller of online commerce and digital marketing services for supermarket and packaged goods brands founded by brothers Rich, Jerry and Brian Tarrant. Rich is now CEO and Jerry is CFO of the company. The Stripes Group invested in the company in 2009.

All told HGGC has done 28 transactions to build 13 platform investments; eight of the 13 platforms are still held by the firm, our source said. HGGC has been involved in $1.8 billion worth of exits since the beginning of 2012.

“This investment is further proof of HGGC’s unique ability to partner with strong management teams and founders who want to continue to invest in and growth their businesses, as well as our expertise in technology-enabled services businesses,” Rich Lawson, co-founder and managing partner at HGGC, said in a prepared statement.

The move by HGGC comes as the online grocery business heats up, with reportedly rolling out its fresh grocery business in San Francisco after testing it in Seattle. Google has launched a test in San Francisco of its Google Shopping Express Service.

The investment in MyWebGrocer comes on the heels of a high-profile exit for HGGC: the sale of Swiss-based portfolio firm Hybris, an e-commerce software firm, to SAP in a deal announced June 5. Sister news service Reuters reported a purchase of at least $1 billion for Hybris.

California Public Employees’ Retirement System committed $180 million to Huntsman Gay Capital Partners Fund LP in 2008 and reported an internal rate of return of 8 percent as of Sept. 30, 2012. CalPERS has invested $132 million thus far and received $156 million back for an investment return of 1.2 times.

With a focus on the middle market, HGGC helps businesses expands globally and frequently allows owners of target companies to hold on to large stakes, according to the firm’s web site.

Besides Lawson, co-founders still at HGGC include J. Steven Young, the Super Bowl-winning former quarterback of the San Francisco 49ers, and Gregory Benson, managing partner. Lester W.B. Moore, a former executive vice president at Bain Capital, serves as a senior adviser to HGGC.