Main Capital
Main Capital is an investment firm specializing in B2B software, founded in 2003 by Charly Zwemstra and Lars van ’t Hoenderdaal. Originally established as a debt and M&A advisory firm focused on the Tech & Media sector, the firm gradually shifted its focus to private equity investments in software companies, under the leadership of Charly Zwemstra, a former partner at AlpInvest.
Starting in 2018, Main completely divested itself of its traditional advisory and mezzanine financing businesses—now consolidated under the name Pride Capital Partners—to become a platform exclusively dedicated to majority investments in enterprise software, thereby eliminating the organizational constraints associated with operating multiple business lines simultaneously.
Since its founding, Main has raised nine lower mid-market funds and two small-cap funds, bringing its total assets under management to €6.8 billion. The firm has grown significantly and now employs nearly 90 professionals across six offices (The Hague, Düsseldorf, Stockholm, Brussels, Boston, and Paris).
Main currently manages an active portfolio of approximately 50 software companies and focuses its investments on its core areas of expertise: profitable, industry-specific companies with recurring revenue that address their customers’ critical needs.
With more than 300 acquisitions completed—including around 100 platform deals and over 200 build-up transactions—Main has established itself as one of Europe’s most active players in software buyouts. The firm is currently investing through the Main Capital and Main Foundation II funds and is preparing to launch Main Capital (€4 billion hard cap) and Main Foundation III (€1 billion hard cap).
An investment strategy offering a particularly attractive risk/return profile
Main Capital exclusively on B2B software companies that fit a specific profile:
- Low capital intensity;
- A resilient subscription model based on SaaS (Software as a Service);
- A diverse and loyal customer base due to the critical nature of the software solutions provided (“mission-critical software”);
- Companies operating in fragmented and resilient target subsectors within vertical software (Healthcare, Public Sector, Financial Services) and horizontal software (Human Resources, Security, Financial Management, Business Process Management, Legal).
These high-quality target assets consistently generate strong recurring revenue upon acquisition, providing clear visibility into the company’s future revenue. Unlike most lower-mid-market managers, who are willing to sacrifice their company’s profitability in order to grow faster organically, Main focuses exclusively on profitable organic growth with reasonable levels of financial leverage.
The result of this highly defensive strategy is a historical loss rate of virtually zero, which is particularly rare among companies with a market capitalization of less than €150 million.
For every euro Main invests in a new company, an equivalent amount is set aside to fund external growth. Main therefore generates its high returns through an intensive external growth strategy (“Buy-and-Build”), which enables:
- To lower its entry price through accretive acquisitions, as the multiples paid for the acquired assets are almost always lower than the multiple paid for the initial platform;
- To expand the platform into new segments and/or geographic markets;
- To achieve industrial synergies;
- To create assets whose strategic value at exit is significantly higher than their initial value (a sharp increase in valuation multiples at exit).
Main relies on high-caliber management teams that are rarely replaced and who share the company’s commitment to a strategy of profitable organic growth and aggressive “buy-and-build” acquisitions.
This strategy has enabled Main Capital to offer an asymmetric risk/return profile: high returns regardless of the economic environment, with a very low loss rate.
A real competitive advantage thanks to its size and track record in the lower mid-market
Main Capital a broad and deep target market, with a large number of companies operating in the lower mid-market. The limited presence of specialized funds capable of competing with Main in this highly specialized market facilitates the negotiation of numerous private, off-market deals, enabling the team to acquire assets at attractive prices.
The firm’s strong institutional structure and the high level of specialization among its teams make it a highly sought-after and preferred partner for target companies in the lower mid-market, as these companies know they will create greater operational and strategic value by working with such an experienced firm.
The investment teams are organized by geography and target subsectors. Proactive sourcing is conducted at all levels to identify all potential targets.
Main also has a high-quality in-house operations and research team that provides portfolio companies with a digital platform featuring a wide variety of tools and guides designed to improve their operations (best practices, pricing strategy, integration, etc.) and facilitate reporting to their shareholders. Main Capital indeed implemented a significant number of standard key performance indicators (KPIs) and technological resources to closely monitor the performance of all its portfolio companies.
Thanks to its high degree of specialization, Main Capital in its in-depth understanding of each niche it explores. This expertise translates into ambitious value creation plans guided by well-established, proven, and continuously refined playbooks (operational development plans) in each of its subsectors.
The firm also organizes several annual events bringing together CEOs, CFOs and CTOs from all their portfolio companies to share their vision, best practices and develop their network.
A European pioneer in software buyouts, with a 20-year lead in the industry
Main is among the first European investors to have developed a strategy focused exclusively on B2B software. Since 2003–2006, the firm has devoted all its resources to this sector, developing exceptional expertise in market dynamics, vertical business models, and value creation drivers in SaaS and on-premises software.This deep historical expertise now makes it one of the very few European players with a sector-specific network, operational practices, and sourcing capabilities comparable to those of the leaders in upper mid-market software buyouts.
A strong, entrepreneurial, and hands-on culture
Main stands out for its highly entrepreneurial internal culture: flat hierarchy, and a strong emphasis on empowering junior staff. Investment professionals, from juniors to partners, are all involved in sourcing, a key feature of the firm. This process, which has been based on a direct approach (cold calling) since the firm’s inception, is now highly targeted thanks to specialization by subsector. This close relationship with founders—often cultivated over several years before a transaction—explains why Main is able to close numerous bilateral deals in a highly competitive segment.
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