How and Where We Invest
We invest in opportunities where we look to drive transformational change. We’re thesis-driven investors. We identify, research, and become educated in the areas we invest. This enables us to deploy capital and resources quickly and with deep conviction. Through our Capvalue Framework®, we strive to build scalable platforms and drive meaningful business transformation.
We seek out entrepreneur-owned businesses in the software, tech-enabled services, and industrial business services sectors, across multiple industries. We look for businesses that have a tenured team of owners or managers seeking a majority capital partner, with solid financials, a defensive business model, untapped growth potential, and competitive advantages within their market niche. We focus on developing highly profitable, differentiated businesses that can be successful well beyond our ownership period.
Our Thoughtful Approach to Accelerating Growth and Achieving Value
- Perform deep research to identify markets
- Become educated on market dynamics and opportunities
- Identify and establish relationships with key entrepreneurs
- Invest in top talent and technologies
- Deploy industry best practices for growth
- Provide functional expertise for scale
- Develop a long-term strategic roadmap
- Execute buy and build strategy
- Seek to deliver enduring value for customers, employees and investors
Where We Invest
Business services are supplied in many ways, from pure software-as-a-service to traditional service delivery that is enhanced using technology. Capstreet has experience working with businesses across that entire spectrum.
Industrial businesses provide crucial products and services to critical plants and facilities. Capstreet aims to help these businesses drive profitable growth by expanding geographically and adding new products and/or services.
Industries Where We Invest
The operating models of healthcare providers and payers are being transformed by technology. We look to invest in business-to-business models that enhance operating efficiency and efficacy for providers (hospitals, ambulatory, and outpatient services) and payers in the areas of compliance, revenue cycle management, and practice management software.
With several recent investments in the automotive technology sector, we’re a thoughtful partner for innovative, growing businesses that are helping transform dealer operations. Within the automotive tech landscape, we target solutions that enhance sales, marketing, finance and insurance, and service lane operations for automotive dealerships.
The complexity of the transportation and logistics sector and the fragmentation of current technology solutions create a rich environment for us to invest alongside innovative businesses that are seeking to solve these challenges with technology in a more integrated fashion. We target several areas within supply chain tech, including track and trace technology, TMS, WMS, e-commerce and omnichannel, procurement software, and supply chain analytics.
The insurance industry is undergoing a rapid digital transformation that allows more efficient risk management and underwriting processes, and wider and more targeted distribution to customers. Within Insurtech, we look for technology-enabled services and software businesses that enhance carrier operations, including digital sales enablement, underwriting, service and administration, and claims management.
Capstreet has identified construction as an industry where we believe technology can drive transformational changes in efficiency and project delivery. The industry is still early on in its technology adoption curve, which we believe creates a ripe environment for growing, innovative software and technology businesses. Capstreet targets software businesses that enable the critical areas of project and financial management for general and sub-contractors.
We believe the provision of hospitality and foodservice is yet another industry that is being rapidly transformed by technology as consumers increasingly leverage electronic mediums either to order, manage, track, or pay for their services. We also believe the sector is highly fragmented and experiencing rapid innovation, which provides the ideal scenario for businesses to benefit from our Capvalue Framework® to rapidly accelerate growth.
Decades of underinvestment in the electric grid is creating an imperative to upgrade and maintain existing infrastructure. Capstreet has several active themes in this sector and a long history of investing in and scaling maintenance services businesses.
The U.S. has seen a surge in investment in petrochemical production capacity in the past 5-10 years, creating a need for technical maintenance providers to service these plants. Additionally, the usage of chemicals is ubiquitous in the U.S. economy as it is a critical input to hundreds of critical and regularly used products. Demand is increasing for the industry to become more sustainable. Capstreet has several current investments and active themes in this industry.
The U.S. manufacturing industry is experiencing a resurgence driven by a re-shoring trend that Capstreet believes will persist. We have significant experience investing in component suppliers and service providers to the manufacturing industry and are actively seeking new investments in this industry.
Capstreet has a history of working with businesses that serve the marine industry with both products and services. Our knowledge of this industry overlaps with our broader transportation & logistics experience, and we believe we are well positioned to help businesses serving this end market scale profitably.
The legal services and technology market remains fragmented and under-adopted. Capstreet has a strong track record of helping businesses scale where these conditions exist. We have specific experience with nuances of the legal industry and helping businesses scale with this customer set as well.
The government technology sector is behind on technology adoption but could benefit from the significant efficiency advantages that specialized vertical software can bring. GovTech shares many of the attractive attributes of other stable, regulated industries where Capstreet has the knowledge and resources to help businesses scale.
What We Look For
- Entrepreneur, family, or employee-owned businesses
- $3 to $15 million of EBITDA
- Software, Tech-Enabled Services, and Industrial Business Services
- Primarily majority investments
- Entrepreneurs reinvest alongside Capstreet
- Ability to apply the Capvalue Framework®