Capping an unexpectedly busy 2021, a local private equity firm has successfully cashed out on two of its earlier investments — including one that was propelled in part by a deal with ties to music legend Bono.
Scott’s Addition-based Blue Heron Capital said this week it exited from its stakes in PresenceLearning and Verisma, two companies it invested in through its first fund in 2013 and 2015, respectively.
With PresenceLearning, — a New York-based firm that provides teletherapy and software for special education and mental health providers in K-12 schools — the exit came in December when Spectrum Equity and The Rise bought a majority stake of PresenceLearning. The Rise was cofounded by Bono.
The exit from Verisma, which handles disclosure management for patient medical records, was made possible by an investment from NewSpring Capital buying out previous investors.
While Blue Heron wouldn’t comment on specific financial details of the two investments, managing partner and co-founder Tom Benedetti said both exits sent positive returns back to its investors.
“It’s a return that we’re very happy with, particularly on the Verisma exit,” he said, adding that it invested $4 million in PresenceLearning and $5 million in Verisma.
PresenceLearning was the first investment made with Blue Heron’s original pooled investor fund. Dubbed Blue Heron Capital Fund I, it gathered more than $30 million in investor capital in a raise that ended in 2013. Verisma was the fourth investment in that fund.
The exits added to several new investments Blue Heron made in other companies last year. Benedetti, who launched the firm in Richmond with fellow managing partner Andrew Tichenor in 2010, said 2021 was a surprisingly busy year, despite the pandemic.
“I thought we were going to have a really slow year because of COVID,” Benedetti said. “We had our most successful year in terms of investing and opportunities.”
In August the firm led a grouped investment round totaling $9.5 million in Cloudtamer, a Maryland-based company now known as KION that makes software to help clients monitor compliance and security when data is stored on the cloud.
In September Blue Heron invested in Ohio-based Aware, which makes software that helps monitor collaboration programs like Slack, Zoom and Microsoft Teams. It marked the second time Blue Heron went in with other firms to invest in Aware.
In October Blue Heron was part of a group that invested $45 million into Shiftmed, an Uber-like company that deploys nurses and caregivers to hospitals, assisted living and other facilities. It was Blue Heron’s second investment in Shiftmed.
Blue Heron’s funds look to invest in businesses with $3 million to $25 million in revenue, primarily in healthcare IT and software.
“We’re catching companies when they’re $3 million-$15 million in revenue. We like to deal in less trafficked areas,” Benedetti said. “We feel we’re really good at uncovering those nuggets.”
Its funds raise capital in part from what it calls operators, those who have built businesses and want to invest in other businesses.
Benedetti said the pandemic and the rapid adoption of virtual meetings has helped Blue Heron connect with more operator investors than it used to do through pre-pandemic in-person meetings.
“One thing COVID has done is accelerated the success of that model because through virtual engagement platforms we’ve been able to get these operators engaged sooner,” he said. “We can recruit and curate this type of talent across the country and not just in our region.”
All of the Blue Heron Fund I capital has been deployed and Benedetti said it expects to make one final investment out of Fund II this year. It began raising Fund II in 2018 and capped it at around $47 million raised.
Benedetti would not say when a third fund might be in the works.
“We’re certainly excited about continuing the model going forward,” he said.