Brian Ruder of Permira shares insights on AI, recent acquisitions, and the benefits of co-leadership in private equity.
London: It’s been quite a year in private equity, right? There have been tons of big acquisitions happening. The take-private scene has really taken off, with firms making over a dozen billion-dollar deals for public tech companies.
Permira, based in London, has been in the thick of it. They teamed up with Blackstone to buy Adevinta, a European online classifieds group, for a whopping $13 billion. And just last month, they took Squarespace private for about $7.2 billion.
But it’s not just about those massive deals for Permira. They also closed a new €16.7 billion buyout fund last year and have funds that invest in earlier-stage companies. Their first investment in this area was Klarna back in 2017, and now it’s gearing up for an IPO.
Brian Ruder, the new co-managing partner and co-CEO at Permira, mentioned they’re still invested in Klarna. He pointed out that with minority growth strategies, they don’t control the exit, so they’re in it for the long haul.
As 2024 wraps up, TechCrunch caught up with Ruder to chat about these recent deals, Permira’s tech strategy, AI, and the co-leadership model they embrace.
Co-leadership is gaining traction in many companies, but it’s been a staple at Permira for a while. Kurt Björklund co-managed the firm with Tom Lister since 2008. When Lister stepped down in 2021, it was a bit odd for a firm that usually has co-heads leading its investment teams.
Ruder explained that they really like the co-leadership model. It helps tackle the loneliness that can come with being a leader. Plus, having someone to bounce ideas off speeds up decision-making, which is crucial.
With Ruder and Dipan Patel stepping into their roles on September 1, things are back to normal. They both hold the title of co-CEO, which is new for Permira. Ruder noted that the title of ‘managing partner’ has become a bit diluted in the industry, so they wanted to clarify who’s really in charge.
When Ruder spoke with TechCrunch back in 2017, they discussed how private equity was getting more interested in tech. Since then, Permira has made several big tech acquisitions, including Mimecast for $5.8 billion and Zendesk for $10.2 billion.
Today, Permira has invested around $28 billion in 80 tech companies, covering everything from SaaS to fintech. Ruder, who has been with the tech investment team since 2008, and Patel, who was on the tech team before moving to consumer, are now leading the charge.
So, is Permira all about tech now? Ruder clarified that they’ve always been focused on growth, not just tech. But since tech is such a big part of the market, it naturally became a major focus over the years.
Even companies you wouldn’t think of as tech firms, like Golden Goose, are using technology in their operations. They’ve shifted to direct-to-consumer strategies, which have really boosted their sales.
Permira’s biggest tech deal this year is Adevinta, which operates various online marketplaces. Ruder emphasized that while Adevinta is a digital brand, it requires a different skill set to attract users compared to traditional enterprise tech.
On the AI front, Permira is keen on how AI is being integrated into its portfolio. Zendesk, for instance, was already exploring AI before Permira got involved, but the rise of generative AI has pushed them to take it further.
Zendesk has made some strategic acquisitions to enhance its AI capabilities, and they’re seeing great adoption from their customers. Ruder believes AI will create significant opportunities, similar to how cloud computing transformed the software landscape.
As for Squarespace, they were already diving into AI before Permira’s acquisition. Permira initially planned to buy Squarespace for $6.9 billion, but had to increase the offer to $7.2 billion after some pushback from shareholders.
Interestingly, Squarespace’s founder and CEO, Anthony Casalena, is staying on board. Ruder explained that while some private equity firms focus on turning around struggling companies, Permira aims to invest in quality businesses that are already doing well.
Ruder summed it up nicely: they look for the best products in strong markets and back them. Unlike many firms that prioritize short-term profits, Permira believes in the power of compounding returns from solid unit economics, which resonates with founders.
