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Stripes (growth equity firm)

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Stripes Group
Company typePrivate
IndustryPrivate Equity, Growth Equity
Founded2003
FounderKen Fox
Headquarters402 West 13th Street New York, New York, U.S
ProductsGrowth capital, Recapitalizations
Websitewww.stripesgroup.com
Inside of office in New York

Stripes Group is a private equity and venture capital firm based in Manhattan, New York, founded in 2003.[1][2]

Stripes Group invests primarily in:[2]

  • Internet
  • SaaS
  • Digital Media
  • Software
  • Healthcare
  • Information technology
  • E-commerce
  • Branded consumer products businesses

Stripes Group focuses on acquiring well-developed start-ups, and makes $10–100 million investments in small companies.[3] Stripes Group currently has $1.5 billion of assets under management, and 18 investments.[4] The firm's portfolio investments include Blue Apron, Seamless and Refinery29.[4]

History

Stripes Group was founded by Kenneth Allen “Ken” Fox,[5] an entrepreneur and investor who was born in Philadelphia, Pennsylvania.[6] In 2000, Fox was awarded as Ernst & Young's Entrepreneur of the Year.[7]

Though Fox has started out as an investment banker at Goldman Sachs, he left his position in 1994.[6] Since, Fox has founded various companies, including Internet Capital Group, ICG Asia, Syndero, A10 Capital, Sentinel Fund, and Stripes Group.[6] Fox has also led investments in over 35 companies and taken two companies he started public.[6] In 1999, Internet Capital Group, a publicly traded venture capital firm that Fox had co-founded, had a market capitalization of nearly $60 billion.[8]

Investments

Stripes Group specializes in emerging growth, growth equity, add-on acquisitions, middle market, stand alone investments, divestitures, management buy-ins, buyouts, take-private transactions, late venture, later stage, industry consolidation, recapitalizations, and more.[9] Stripes Group uses various "M&A" (mergers, acquisitions and joint ventures) strategies as solutions for portfolio companies that seek to increase shareholder value or reduce shareholder risk,[10] In addition, the firm looks for relatively mature companies that are looking for capital to expand or restructure, enter new markets, or finance a significant acquisition of another company without a change of control of the business.[3]

Stripes Group invests in companies with valuation up to $300 million and EBITDA between $2 million to $20 million, and revenue greater than $15 million or greater than 20 percent annual revenue growth.[3] Stripes Group is also open to co-investing, with management teams being significant equity shareholders. Stripes Group seeks exit between two to four years.[4]

In addition, Stripes Group lists its potential target investment criteria to be:[4]

  • Sectors: Internet, Software as a Service, Healthcare IT, Branded Consumer Products
  • Equity Check: $10 – $100 million per transaction
  • Control Agnostic: Buyouts or minority transactions
  • Geography: North America or Western Europe
  • Profitability: Break-even to $20 million EBITDA
  • Scale & Growth: Greater than $10 million in trailing revenue
  • Founder Backed: Significant founder liquidity
  • Prior Ownership: Limited prior institutional capital

Stripes Group emphasizes entrepreneurial spirit and partnership over acquisitive relationships with the companies they invest in.[4] Stripes Group has stated:

“We partner with entrepreneurs and operating executives in rapidly growing and profitable technology-enabled and consumer products companies with the simple goal of maximizing the appreciation of shareholder value while reducing operating risk. We make minority or majority investments in profitable companies with proven business models that are providing differentiated value to customers.”[11]

Stripes Group’s complete list of portfolio investments and committed capital include:[2][4]

Company Size/ Committed Capital ($M)
Art.com [1] [2] N/A
Audio Network [2] [12] N/A
Blue Apron [3] [13] $50M
Elance [4] [14] $16M
eMarketer [5] [15] $25M
Epic Advertising (merged with Connexus Corp.) [6] [16] $25M
Folica.com [7] [17] N/A
Kareo, Inc. [8] [18] $20.5M
Kinetic Social [9] [19] $48M
MyWebGrocer (acquired by HGGC) [10] [20] $13M
Netbiscuits [11] [21] $27M
NetQuote (acquired by Bankrate) [12] [22] N/A
Pond5 [13] [23] $61M
Refinery29 [14] [24] $20M
Sandata[25] [15] N/A
Seamless [16] N/A
SilverSky (Formerly Perimeter eSecurity) [17] [26] $54M
SmartWool (Acquired by Timberland Corporation) [18] [27] N/A
Stella & Chewy's [19] N/A
Turtle Beach [20] [28] N/A
Notable Investments
Seamless is an online food ordering service that allows users to order food for delivery and takeout from restaurants through their web site or a mobile app.[4] Founded in 1999 by Jason Finger and Paul Appelbaum as "SeamlessWeb," Seamless was founded as a corporate ordering solution to compensate for employees who worked overtime, as Seamless allowed quick billing and invoicing automation.[4] Though originally focused only on the NYC market, SeamlessWeb management realized there was a significant opportunity to target the consumer segment in 2011 and sought a financial partner to help capture the consumer market.[4]

Shortly after investing capital in 2011, Stripes leveraged its in-house recruiting resources to build-out the team including placing a Chief Technology Officer. Stripes also helped increase marketing and customer acquisition efforts, and additionally advised Seamless’ acquisition of Menupages, an online local menu directory.[4] On August 9, 2013, Seamless and GrubHub completed their merger and now operate under the name "GrubHub Seamless". The merger resulted in connecting diners with approximately 25,000 restaurants for online and mobile ordering across the United States and in London. In the first half of 2013, the combined organization processed approximately 130,000 orders a day and $1 billion food orders a year.

Refinery29 is a magazine-style internet website founded by Justin Stefano and Philippe von Borries in 2005.[29] The website is a fashion-forward city guide for metropolitan cities in the United States, such as New York, City, Los Angeles, Chicago, San Francisco, and Washington, D.C.[29]

Since its launch in 2005, Refinery29 has grown to draw one billion pageviews per year. [30] The website has also been ranked as #179 on the Inc. 500 list of "America's Fastest Growing Private Companies".,[31] and in 2011, Refinery29 earned $8 million in revenue.[32] Philippe von Borries has stated, “With Stripes Group, we saw a partner who deeply shared our vision for a next generation media brand and brings a wealth of knowledge in scaling digital consumer companies.” [29] Stripes Group partnered with Refinery29 to build the next generation media brand, and invested $20 million in Refinery29.[2]

Kareo is a SaaS founded by Dan Rodrigues to make medical billing more efficient and less costly.[4] Kareo is an online technology that delivered quick and cost-effective methods for managing medical practices from the cloud.[33] The founder of Kareo then sought an end-to-end technology platform for the small practices that included managing the administrative elements of a practice to automating the clinical input of information for doctors.[4] Because this vision required a growth equity partner, Rodrigues worked with Stripes Group to accelerate sales, marketing and development of the product. Stripes Group invested in 2012, and then again in 2013 to fund a strategic acquisition, as the Kareo rolled out its end-to-end technology platform and continued to grow the business.[4]

References

  1. ^ Commercial Observer: Check Out Stripes Group’s New Home at 402 West 13th Street as accessed on March 24, 2014.
  2. ^ a b c d e CrunchBase: Stripes Group as accessed on March 24, 2014.
  3. ^ a b c Bloomberg Businessweek: Company Overview of Stripes Group as accessed on March 24, 2014.
  4. ^ a b c d e f g h i j k l m Stripes Group as accessed on March 24, 2014.
  5. ^ CNNMoney: Where Are They Now? as accessed on March 24, 2014
  6. ^ a b c d Crunch Base: Ken Fox as accessed on March 24, 2014.
  7. ^ Ernst and Young Entrepreneur of the Year Award as accessed on March 24, 2014.
  8. ^ NY Times: COMPANY NEWS; INVESTMENT GROUP TO BUY MAJORITY STAKE IN RIGHTWORKS as accessed on March 24, 2014.
  9. ^ Business Week: Stripes Group as accessed on March 24, 2014.
  10. ^ Stowell, David. Investment Banks, Hedge Funds, and Private Equity. Waltham, MA: Academic, 2013. Print.
  11. ^ Wall Street Oasis: Stripes Group as accessed on March 24th, 2014.
  12. ^ Finsmes: Audio Network Receives Minority Investment from Stripes Group as accessed on March 24, 2014.
  13. ^ TechCrunch: Blue Apron Closes $50M Led By Stripes Group At $450M Valuation as accessed on April 30, 2014.
  14. ^ TechCrunch: Online Job Marketplace Elance Raises $16M as accessed on March 24, 2014.
  15. ^ AdWeek: $25M Investment eMarketer Girds New Growth as accessed on March 24, 2014.
  16. ^ Online Marketing: Connexus Merges with Epic as accessed on March 24, 2014.
  17. ^ Beauty Store Business: Folica as accessed on March 24, 2014.
  18. ^ Health2Con: Kareo Raises $20.5M as accessed on March 24, 2014.
  19. ^ AdExchanger: Kinetic Raises $8 Million as accessed on March 24, 2014.
  20. ^ TechCrunch: MyWebGrocer Raises $13M as accessed on March 24, 2014.
  21. ^ TechCrunch: Netbiscuits Raises $27M By Stripes Group as accessed on March 24, 2014.
  22. ^ PR Newswire: Stripes Group Acquires NetQuote as accessed on March 24, 2014.
  23. ^ WSJ.com: Shutterstock and Getty Images Competitor Pond5 Raises $61 Million as accessed on July 17, 2014.
  24. ^ TechCrunch: Refinery29 Raises 20 Million From Stripes Group as accessed on March 24, 2014.
  25. ^ Finsmes: Sandata Receives Minority Investment From Stripes Group as accessed on March 24, 2014.
  26. ^ PEHub: eSecurity Keeps Raising as accessed on March 24, 2014.
  27. ^ Washington Post: Timberland to buy SmartWool as accessed on March 24, 2014.
  28. ^ The Middle Market: Stripes Group Buys Turtle Beach Gaming Headset as accessed on March 24, 2014.
  29. ^ a b c Citybiz List: Refinery29 Raises $20M in Series C From Stripes Group as accessed on March 24, 2014.
  30. ^ Refinery29 as accessed on March 24, 2014.
  31. ^ Inc.: Refinery29 as accessed on March 24, 2014
  32. ^ TechCrunch: Refinery29 invades San Francisco as accessed on March 24, 2014.
  33. ^ Kareo: Kareo raises $20M to fuel growth as accessed on March 24, 2014.
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