Private equity giant CVC takes aim at tech start-ups

Investment firm CVC has launched a search for tech start-ups to acquire, with plans to plough between $100,000 to $5 million into suitable ventures.

CVC, which is listed on the ASX, is on the start-up trial due to its investment vehicle Cellnet, an Australian mobile accessories distributor. Cellnet is looking for complementary companies to improve its digital offering, especially in the area of eCommerce.

Eddie Wilson, investment manager at CVC, is leading the hunt for suitable investments. He says that although CVC would be prepared to invest more, he expect there to be a $5 million cap on acquisitions or equity stakes.

“Cellnet is uniquely placed as it has the back-end sorted with its logistics and distribution,” he says. “It just needs the online strategy to take advantage of that. It’s more about moving product than services.”

 Wilson says he is confident that he’ll be able to find investable start-ups in the Australian market.

“I’ve got no doubt that there are opportunities out there,” he says. “Everyone seems to have an idea, but it’s about whether that idea can be run as a proper business. It’s the role of a VC to identify that.”

“Broadly speaking, I’m looking for three things. I want a concept that has proven customer appetite, even if that’s bare bones market research to show a verifiable customer base.”

“We also want the website or technology to have great functionality and we want it to have proof of scale. We won’t be investing $100,000 and hope for our money back within a year – we want something that grows exponentially.”

Wilson says that he’s not overly concerned about the age of a business, rather that it ticks the right boxes.

“Every investment, ultimately, is about people and I’m a big believer in that, I don’t pay lip service to it,” he says.

“We want someone with technical skills, but also commercial skills and leadership capabilities. I’m a big believer in eCommerce and mCommerce and I know what it takes.”

This article first appeared on StartupSmart

This article originally refered to to CVC as the owner of Nine Entertainment. CVC Ltd has no involvement with Nine which is, in fact, owned by CVC Asia Pacific. We have now clarified this in the article.