In a move to bridge the divide between venture capital and private equity, Resurge Growth Partners in London has introduced a €120 million venture equity fund. This initiative is designed to cater to European and Israeli companies that have matured beyond traditional venture capital needs but are not yet primed for private equity investment. By targeting these high-potential scale-ups, Resurge aims to capture a unique market segment that remains underserved. This approach allows scale-ups to pursue profitable growth strategies without the constant need for fundraising, promising a more sustainable business trajectory.
Resurge Growth Partners’ latest move follows a growing trend of addressing the gap that exists between venture capital and private equity. Historically, scale-ups have faced challenges in securing funding once they outgrow the initial stages supported by venture capitalists. Previous efforts have often focused on expanding traditional funding models, but Resurge’s venture equity fund offers a nuanced solution through operational support and significant stakes in scale-ups. This innovative approach sets them apart in an evolving investment landscape.
Who Benefits from Venture Equity?
Venture equity is particularly suited for companies identified as “Venture Graduates.” These entities typically generate healthy revenues but fail to meet the criteria for venture capital or private equity backing. By acquiring stakes in such companies, Resurge offers both capital and strategic guidance, enabling them to shift from VC dependency to a model centered on self-sufficiency and profitability. The firm has already secured nearly half of its capital, reflecting confidence from its founding general partners and a major family office, with additional contributions expected from select investors.
How Does Resurge Implement Its Strategy?
The implementation strategy involves acquiring significant stakes in promising companies through buyouts, recapitalizations, or collaborations with current investors. These acquisitions focus on tech and tech-enabled businesses across the UK, Europe, and Israel with revenues exceeding €8 million. By providing both financial resources and strategic advisory, Resurge helps founders simplify complex cap tables, end the cycle of continuous fundraising, and transition to a long-term, profit-centric strategy.
Co-founder Eyal Malinger emphasizes the importance of aligning with companies possessing strong fundamentals but complicated cap tables.
“In times of a bearish market, many high-potential companies find themselves stranded without the necessary funding. Conversely, during periods of abundant capital, founders often find their cap tables excessively complicated, limiting long-term prosperity,”
Malinger stated. This approach aims to unlock substantial value for both companies and investors by realigning interests and operational models.
Resurge Growth Partners, co-founded by Oren Peleg and Eyal Malinger, brings extensive experience from the private equity and technology sectors. Their combined expertise allows Resurge to integrate advanced AI tools into their operations, enhancing productivity and decision-making processes. The use of such technologies enables them to identify opportunities swiftly and allocate resources efficiently, fostering a supportive environment for portfolio companies to thrive.
Resurge Growth Partners’ venture equity fund represents a significant step in evolving the financial landscape for scale-ups, particularly those in technology sectors. By infusing capital and operational expertise, the firm not only facilitates growth but also mitigates the risks associated with traditional fundraising models. This strategic direction could redefine how high-potential companies navigate the challenging transition from venture backing to self-sustained success.
