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Ideagen’s £103.5 Million Raise Adds Firepower To Its Aggressive Growth Strategy

During December 2021, Ideagen, a UK-based EHS and quality software provider, raised £103.5 million through placement of ordinary shares. The significant investment represents a new chapter for the firm and opens up the gateway to pursue previously unattainable acquisition targets. Investments of this magnitude in the EHS software market are rare; the last time an investment surpassed this value came in January 2020 when CVC Growth Partners invested $200 million in sustainability supply chain data provider, EcoVadis. So, what does this mean for Ideagen and what are the implications for the EHS software market as whole?

Ideagen is no stranger to substantial investments, which it uses to support an aggressive acquisition driven growth strategy - its bullish approach to market expansion has resulted in more than 20 acquisitions in the past 9 years. This strategy is founded on the principle of selecting acquisition targets which broaden its capabilities and, where possible, consolidate the market. For instance, following a £75 million investment from Santander UK and NatWest in May 2021, the firm acquired OpsBase, a H&S compliance platform and Mi-Co, a low- and no-code app developer. More recently in November 2021, Ideagen made its largest acquisition to date, worth £57.7 million, whereby it acquired Sydney-based governance, risk and compliance (GRC) provider CompliSpace. As a vendor with existing GRC capabilities and a concerted focus on quality management, the acquisition of CompliSpace will not only deepen its GRC capabilities, but also expand the firm’s footprint geographically. Consequently, Verdantix anticipates this huge sum to quickly translate into further acquisitions which align with the firm’s strengths and support further geographical expansion.

Ideagen’s growth strategy is an interesting case to study; although acquisition led growth is certainly a trend in the market, few other providers have acquired firms quite so aggressively. This raise offers further evidence that investors are buying into Ideagen’s uncompromising strategy and its resulting returns - the firm is targeting £200 million annual recurring revenue by April 2025. Undoubtedly contributing to this is the alignment of EHS and GRC functionality with ESG and sustainability use cases. Consider Sphera’s $1.4 billion acquisition by Blackstone for further evidence. The large volume of acquisitions also serves as an example of how a firm can expedite IP development, geographic expansion and customer growth. Despite a host of benefits, this quantity of acquisitions is a rarity in the industry. As EHSQ software customers increasingly demand integrated, holistic solutions with strong inter-module integration and UI consistency, rapid development comprised of point solutions may present challenges in meeting these evolving customer expectations.

For further insights on the EHS software market and market news, visit the Verdantix website.

EHS Ideagens 103.5 Million Raise Adds Firepower To Its Aggressive Growth Strategy

Christopher Sayers

Analyst, Verdantix
Verdantix

Chris is a Technology Analyst in the Verdantix EHS practice. His current research agenda focuses on digital mental health and wellbeing solutions. Chris joined Verdantix in 2020 and has previous experience at EY, where he specialised in robotic process automation (RPA). He holds an M.Eng. in Engineering Science from Oxford University with a concentration in machine learning and machine vision.