Private equity firm Hg is set to acquire a majority controlling stake in Calgary-based corporate social responsibility software startup Benevity.
BetaKit has confirmed earlier reports that Hg is buying majority control of the company. Benevity announced Thursday that it has secured an investment from Hg, though did not disclose the terms of the transaction. The Globe and Mail reported that London, UK-based Hg purchased control of Benevity, bringing the Calgary company’s valuation to more than $1 billion USD.
Following the report, founder Bryan de Lottinville confirmed in a blog post that Hg is buying majority control of Benevity. He also confirmed that he along with long-time Benevity investors JMI Equity and General Atlantic “are rolling a significant portion of their respective interests into the deal.” The transaction reportedly brings Benevity’s valuation to more than $1 billion USD.
According to Benevity’s announcement on Thursday, Hg is leading the investment in partnership with General Atlantic and JMI Equity, which will both remain “significant investors…alongside the Benevity management team.”
The transaction is expected to close in January, with Benevity noting that Hg’s investment will be used to further accelerate and scale its “pioneering leadership” in the Environment, Social, Governance (ESG) category.
“This is a fantastic result for Benevity, our people, our clients, our investors and our city,” de Lottinville wrote. “Frankly, I was concerned that we might end up being sold, which was not my preference. The world needs Benevity to continue to scale, become more ubiquitous, drive more convenience, democratization, automation and efficiency in how companies and people connect to a sense of meaning, purpose and impact in their lives. That is what our platform does, and this financing will help us do it better, for more companies, with more users, in more countries, benefiting more causes.”
One of Calgary’s largest and most successful tech startups, Benevity reaching unicorn status is a notable achievement for the company and the region’s tech sector. Benevity was founded in 2008 as a platform that enables companies to engage their employees and customers around social responsibility and community investment, hoping to create better business and social impacts. The startup is also one of the largest in the Prairies, said to be generating around $100 million in annual revenue.
In October of last year, Benevity raised a $40 million Series C from JMI Equity and General Atlantic. That round reportedly brought Benevity’s valuation close to $400 million USD.
Benevity employs more than 600 people, with a customer base of 650 clients spanning large, global enterprises like Microsoft, Coca-Cola, Google, and Honda. The startup’s software is currently available in 20 languages and accessible to a reported 19 million employees or users. Since it was founded, Benevity claims to have processed almost $6 billion dollars in donations and 34 million volunteering hours.
Earlier this year, founder and CEO de Lottinville had been set to step down from his role as of June 1. In May, Benevity confirmed the transition with BetaKit, noting that de Lottinville was set to take on a new position as executive chairman and step back from an active day to day role with the company. Andrew Huddart, formerly CEO of professional training group TwentyEight, was set to become CEO of Benevity. A company blog post from July notes, however, that following a transition that took place in June, Huddart had to step down “due to health reasons” and de Lottinville resumed his role as CEO.
Benevity’s executive team also saw changes earlier this year when Eloqua and Nudge.AI co-founder Steven Woods joined as CTO. Woods took over the role from Benevity co-founder Jason Becker, who served as interim CTO for seven months during the search for a permanent replacement. Benevity CFO Kelly Schmitt was also promoted to president and CFO of Benevity this year. Other senior technology hires include vice president of engineering, John Mortimer, who joined the team in September 2019, and vice president of product, Grant Bryce, who started in November 2019.
Image source Benevity via Twitter