We invest in companies that provide software to niche vertical markets.
These companies have a deep understanding of their customers’ unique needs and an offering that is difficult for competitors to replicate.
Technology
Throughout its history, the Stephens family has always invested opportunistically in technology, including as early as the 1940s in various telephone style investments. Today, more than 75 years after the first technology investment, vertical software is a key investment focus for the firm.
1968
Backed Walter Smiley to create Systematics, a core bank data / processing engine that still makes up most of publicly traded FIS’s bank core business.
1990
Doubled down on TMT via Alltel, when Alltel acquired Systematics and Stephens becomes one of its largest shareholders.
2003
The Stephens Group invests in SmartSignal which was sold to General Electric in 2011.
2007
Sold Alltel to TPG and Goldman Sachs for $27.5B, one of the largest buyouts in history at that time.
2016
The Stephens Group invests in CS Disco, Inc. which IPO’d on the NYSE in 2021.
2020
Through its affiliation with WestCap Group, LLC, The Stephens Group invest in StubHub/Viagogo, the world’s leading marketplace for live event ticketing and Goodleap, a market leading point-of-sale platform for financing sustainable home solutions.
2021
The Stephens Group and Princeton TMX complete a significant strategic transaction designed to accelerate the value Princeton TMX delivers to industrial shippers.
2023
Stephens Group invests in Accredible – the world’s leading digital accreditation software platform.
LineLeader offers robust CRM and CMS solutions purpose-built for childcare centers.
End markets of particular interest include:
EdTech
FreightTech
GovTech
InsurTech
Company attributes we look for:
Products and services that are highly tailored to a unique end-market
Deep integration into the customers’ ongoing business operations
Strong unit economics
Innovative and efficient means for growing existing customers and attracting new ones
Intuitive, customer-driven product or service development pipeline
Capital efficient business model
Investment Criteria:
Interested in both majority recapitalizations and minority growth investments
Buyout Check Size
$50 – $150 Million
Growth Equity Check Size
$5 – $50 Million
- $5 Million+ ARR
- Strong Gross and Net Retention
- 70%+ Gross Margins
- Sustainable and Efficient Unit Economics
- Highly Capital Efficient