Exit Lessons From Bridgepoint's $650M Buyout of LumApps

In a French ecosystem starved for exits, a beacon of hope arrived with the announcement that Lyon-based LumApps had been acquired by PE firm Bridgepoint for a cool $650 million. To put that amount in perspective, advisory firm Avolta reported that €5.3 billion was the total value of all exits by French tech companies in 2023 – about in line with historical averages.

While founders and VCs like to dream of splashy IPOs, the reality is that acquisitions are by far the most common exit. One of the strongest categories of acquisitions now is buyouts of venture-backed companies by Private Equity firms like Bridgepoint.

Indeed, this is Bridgepoint’s second PE buyout of a French company in the past 12 months, following its €338 million acquisition of Equativ in 2023. Of the 10 largest exits of French tech companies in 2023 tracked by Avolta, 5 were PE Buyout Deals.

The bar is incredibly high to attract the attention of PE buyers. Given that PE buyouts are likely to remain a critical source of exits, it’s worth understanding the criteria a firm like Bridgepoint applies to such deals – and how LumApps delivered the right metrics for a deal like this to make sense.

In The Beginning...

CEO Sébastien Ricard co-founded LumApps in 2012 with Lionel Grivel, Elie Mélois, and Olivier Chanoux. The company’s foundation is a Social Intranet service that enterprises can deploy to connect employees to improve knowledge sharing and collaboration. It integrates with tools like Google’s G Suite and Microsoft’s Office 365.

As workplace applications have proliferated – Salesforce, Zoom, ServiceNow, Workday – LumApps has expanded to become an internal hub to centralize these digital tools. The goal is to simplify their use and improve employee engagement. The SaaS platform uses an AI-powered interface to customize each employee’s experience and interaction with these applications.

“We are a single digital front door,” Ricard said. “We help companies build the best employee experience by providing the intranet that gathers all of these things in a single place. In a world where information and employees are deeply dispersed, we simplify access to information, tools, and AI engines.”

The company continues to expand its product through new video and mobile features, as well as a GenAI companion and workplace educational solutions. It completed 4 acquisitions (Novastream, HeyAxel, Teach On Mars, and Vizir) to add some of these new technologies.

As LumApps has evolved from an intranet product to this broader employee experience mission, Bridgepoint partner David Nicault said the firm believes LumApps is at the frontier of a market with massive potential. Defining this new market opportunity was one of the key pillars for Bridgepoint in the deal.   

“We're really interested in their wider market of employee experience,” Nicault said. “We've discovered that over the last couple of years as consumers, we are really well treated. And as clients, we are well-treated in B2B. But companies and tech have spent less time improving the employee experience, especially for large groups. It’s becoming increasingly important with the new generation coming into the ranks because they are used to flawless digital tools on the consumer side.”

Money Matters

LumApps company has been extremely capital efficient, raising $102 million over three rounds between 2017 and 2020 from such investors as Eurazeo, IRIS, Bpifrance, and Goldman Sachs. It leveraged that money into a global presence with 5 million users 700 global clients and 350 employees.

During a period when VC money flooded the startup system and founders were encouraged to chase growth at all costs, LumApps maintained a discipline that produced the kind of growth and unit economics that appealed to PE buyout firms. By last year, the company had become profitable – but was also at a crossroads.

LumApps needed more cash to accelerate its growth along several axes: Expanding its global salesforce, continuing product development, making strategic acquisitions, and ensuring it had the resources to support bigger investments into GenAI.

Ricard considered the IPO process to be too complicated and lengthy. The company could have raised a late-stage round from a Growth Equity or PE firm. But such a deal wouldn’t necessarily provide the financial firepower and flexibility needed. Then there was a possible sale to a larger tech company or strategic buyer, though Ricard and his team would effectively become managers fighting to keep their technology a priority within a larger beast.

As LumApps was going through its fundraising decision process, Bridgepoint proposed a PE Buyout. Bridgepoint has €62 billion of assets under management and an international team of 200 across Europe, North America, and Asia. France is Bridgepoint’s 2nd largest office after London by investment size.

The Criteria

Let’s take a closer look at the main criteria that Bridgepoint considered in making this deal: