Ten years ago, Summit Partners established its London office as a base to identify rapidly growing European companies and to help its North American portfolio companies establish themselves on the continent. Scott Collins, a Managing Director who opened the London office in 2001 and continues to lead it, talks about the early days and why the Summit culture works across geographies and cultures.
Why did Summit Partners decide to open a London office?
We viewed the opening of the London office as a natural step in the growth of our business. There were three primary factors that contributed to our decision. First, we knew there were outstanding entrepreneurs and growth companies in Europe that would be an excellent fit for Summit’s growth equity focus. Second, Summit had reached the organizational size and scale that made it possible to expand into Europe. And third, we recognized that many of the industries we served were becoming increasingly international in scope. Being on the ground allowed us to react more quickly to investment opportunities and helped us to deliver additional value to both our European and North American portfolio companies.
How did you modify the Summit approach to match the needs of the European market?
Our fundamental approach remained the same. We found that the elements that make a growth company successful—the challenges facing these companies and the work required to help them grow—were remarkably consistent from North America to Europe. We used the same basic processes, such as helping European entrepreneurs fill out their management teams, building the systems and infrastructure to support growth, formalizing corporate governance and designing incentive programs.
The main difference, of course, was that we were operating in many countries with different cultures and languages. That’s one reason we staffed our office from the very beginning with European nationals. In the early years, we brought over a few American professionals to transport Summit’s business methods, culture and focus. Once that was in place, we exclusively hired European professionals who added local market knowledge to Summit’s deep financial and industry expertise. Today, our investment professionals are European nationals who collectively speak more than a dozen languages— from French, German, Spanish and Romanian to Italian, Dutch, Arabic, Greek and Portuguese.
Do you find that European entrepreneurs differ from their North American counterparts?
We find European entrepreneurs every bit as ambitious and driven as their North American counterparts—in fact, some of the most talented entrepreneurs that Summit has ever partnered with have been European business owners. Having said that, some cultural differences clearly do exist in Europe, and there is a different network of investors, intermediaries and business owners.
Prior to our expansion, the conventional wisdom was that European entrepreneurs would not respond well to direct outreach from a U.S.-based growth equity firm. What we found, however, was that our deep industry knowledge—particularly in fast-changing sectors like healthcare, financial services and software—was actually more important to business owners than local-market roots. Since 2001, Summit has invested in 16 European companies, including AVAST Software, Bigpoint, Fermentas International, vente-privee.com, Jamba!, SafeBoot Holdings and Web Reservations International.
What are some of Summit’s notable European investments?
In 2003, Summit Partners invested $40 million in Jamba! and helped the Germany-based company expand its mobile content footprint across Europe, while offering a global perspective on exit opportunities. VeriSign acquired Jamba! in 2004.
Our 2005 investment in Netherlands-based SafeBoot Holdings helped the mobile data security provider accelerate its growth in the encryption software market, while allowing the company to retire early shareholders. McAfee acquired SafeBoot in 2007.
We invested in France-based vente-privee.com in 2007, helping the internet-based flash-sale retailer expand its network of vendors and customers throughout Europe. Recently, we helped vente-privee.com establish a strategic joint-venture partnership with American Express, extending the firm’s reach into the U.S. market.
Our 2010 investment in AVAST Software helped the Czech anti-virus software firm continue its strategy of providing a quality, free antivirus solution to the widest possible audience. We have since assisted the company in its expansion into the critical U.S. market, guiding them as they opened a Silicon Valley office.
Is growth equity well understood in Europe?
Yes, I believe it is. Growth equity has become a buzzword in the last five years—not just in Europe, but in the United States as well. At Summit, of course, we’ve been investing in rapidly growing companies for more than 27 years. In fact, we started well before it was fashionable. Our model— partnering with entrepreneurs in successful, profitable growth companies—has always resonated for certain types of European business owners, and it continues to appeal to them. Many European entrepreneurs appreciate the fact that we are true partners, not investor-owners, and that we are willing to invest as minority shareholders, as we do in more than half of our partnerships.
What kinds of entrepreneurs do you target?
We seek world-class entrepreneurs who are ambitious and want to dominate their industry—the very same kind of entrepreneurs that we look for in other geographies. These entrepreneurs have built rapidly growing companies with proven business models.
Their companies not only have records of revenue and earnings growth, but also have the leadership capable of sustaining that growth. Often, these entrepreneurs are looking for a partner to help them achieve scale and expand geographically. Ultimately our goal is to work with the best.
Summit Partners in London Snapshot
• Since opening a London office in 2001, Summit Partners has made 16 investments in 11 European countries.
• Today, European companies account for approximately 25 percent of Summit’s currently invested capital.
• Our London office is staffed by European nationals who collectively speak more than a dozen languages.