Who said there wasn't big money in software that helps people? Apax Funds, a private equity firm, announced today that it will combine three social impact companies to create a platform in a deal worth $2 billion.Apax purchased EveryAction from Insight Partners as well as Social Solutions from Vista Equity Partners to build this social good juggernaut. These are two firms that we see often involved in SaaS deals.Apax purchased CyberGrants in June. The plan is to merge the two companies. EveryAction provides companies with a platform for customer engagement that is focused on nonprofit needs. Instead of trying get people to spend more money, the goal is to increase donor engagement. Social Solutions allows you to gather data about an organization's activities. You can use that data to coordinate service delivery or measure your progress towards your service goals.CyberGrants, a platform for corporate responsibility, is designed to assist companies in creating programs that allow employees to volunteer in the community. It also maximizes the impact of corporate Philanthropy.Social Solutions CEO Erin Mulligan Nelson sees the combination of these three companies as an opportunity to speed up their individual efforts. The combination of the three companies will allow human services agencies from both the public and non-profit sectors to fully take advantage of the digital transformation opportunities. She stated that our expanded offerings and opportunities to innovate will provide real value to our clients and improve outcomes for those they serve. This will help them accelerate sustainable social change.Although the three companies share a common theme, which is software that helps customers work more efficiently in a social context, it could be difficult to combine three different companies into one platform, even though the new company will have plenty of numbers.Apax reports that the combined companies will generate $200million in revenue. This includes 650,000 non-profits, half of the Fortune 500 and coordination of 38 million donors and volunteers. This is certainly scale.PE firms are more likely to seek deals in companies undervalued that they can grow and find missing value. If that includes software that helps charitable efforts, then so be it. Apax purchased these companies from other PE companies, indicating that they are interested in this area.According to Crunchbase data Social Solutions was the only company that raised venture capital. It raised $70 million, including a $59million investment from Steve Ballmer, former Microsoft CEO. These three companies, EveryAction, CyberGrants, and Social Solutions, are older than most PE deals. They could be modernized or could benefit from additional investments from companies like Apax. Apax hopes that by combining these three businesses, it can become a major player in this market.Sometimes, bigger is better. Sometimes it is not. Apax will find out in time if it can pull this off. Apax will close the deal as normal, subject to closing conditions.
