3. Interview: Main Capital Partners
Main Capital Partners, an established private equity firm, headquartered in The Hague, Netherlands, has achieved significant advancements in the Nordic region since establishing a local office in 2019. Argentum had the privilege to converse with Jonas Bäckman, Senior Investment Manager at Main's Stockholm office, to acquire insights into their Nordic initiatives and the firm's strategic approach to investments.
Since opening its Nordic office in 2019, Main Capital Partners has been on an ambitious growth trajectory. According to Bäckman the firm wasted no time establishing its presence.
– I would say that we hit the ground running in 2019 and have maintained that pace ever since. We opened the office in May 2019, and by June, we closed our first platform investment in Assessio. Within three months, we closed our first international add-on for the same company in the Dutch market. Since then, we've built a strong cross-Nordic team and portfolio. Today, we have platform investments in all four Nordic countries, says Bäckman.
Jonas Bäckman began working for Main when their Stockholm office opened. He describes a fast-paced work environment with several notable milestones:
– It was great to see Main ranked as the most active software investor in the Nordics for the five-year period 2019-2023 as well as 2020-2024, despite being new to the market.
Main's first Nordic exit, Assessio, in 2023, marked a notable milestone for the Nordic team. Over the past six years, they have successfully executed 12 platform investments and completed more than 34 add-on acquisitions.
– We are proud of our growing portfolio, and not to mention our talented and close-knit cross-Nordic team.
Digital adoption and early expansion make the region attractive
The Nordics have long been recognized as a hub for software innovation, making them a prime target for investment. Main Capital Partners sees the region as particularly attractive due to its strong business culture and digital adoption.
- The combination of entrepreneurial spirit and a high degree of digitalization has created a large ecosystem of highly attractive software businesses, Bäckman notes.
Another key factor is scalability.
— Nordic software companies tend to expand internationally early due to the relatively small home markets, aligning well with Main’s strategy of building sizable, highly differentiated and internationally scalable software groups. Our sector experience and local market intelligence, combined with performance excellence, enable us to execute smart add-on acquisitions and implement "buy and build" strategies effectively.
— Further, we see that the degree of recurring revenues is on average higher than for example in the DACH region, something the Nordics have in common with the Benelux region. On the other hand, we see that Nordics software business have on average, a lower proportion of their revenues generated through partnerships. This is an area where we believe many Nordic software businesses can further leverage opportunities for expansion, Bäckman continues.
Despite these differences, Bäckman notes that software companies across Europe share many cultural similarities, making cross-border integrations relatively smooth. However, regulatory differences and important nuances in business cultures reinforce the need for strong local market knowledge.
- That’s where having an experienced investment partner with a local footprint makes a real difference, he concludes.
Despite market challenges, 2024 was a successful year for Main
When reflecting on the past year and considering the market conditions for software, Bäckman observes that 2024 experienced a general slowdown in growth. Factors such as rising interest rates and changing investor preferences led companies to prioritize profitability over aggressive expansion.
– Macroeconomic challenges like inflation, margin pressures and AI-driven IT spending, as well as changing investor preferences have impacted the industry. However, at Main, we have always advocated the importance of sustainable, profitable growth. As a result, our portfolio has experienced less dramatic impacts from these macroeconomic factors and the industry-wide shift in strategies. We’ve rather seen the shift in strategies as a validation of our approach, but at the same time we recognize the need to stay vigilant to the changing dynamics in the software industry, Bäckman states.
– We’ve had an active year in the Nordics with three platform investments and seven add-on acquisitions. In many of these cases, we've connected directly with entrepreneurs, establishing common ground through sector knowledge and a shared strategic vision.
Despite challenges in the macroeconomics and geopolitical uncertainty that impacted the market in 2024, Main had a very successful year.
– We concluded a six-month dual fundraise at a combined hard cap of over €2.4 billion, nearly doubling our prior funds. In total we made 41 strategic investments, including 13 platforms, 25 add-ons and three business combinations. Additionally, we completed five successful exits and moved into new headquarters. It has been a busy year.
Navigating uncertainty with a resilient investment strategy
Overall, Bäckman expect an increase in deal activity in 2025 due to the normalization of interest rates and that businesses resume postponed transactions.
– However, there remains significant geopolitical and macroeconomic uncertainties, especially in industries heavily dependent on global supply chains. Although our focus segment of B2B software is less directly affected by these issues, it is important to remain diligent.
Bäckman adds that growth pressures in the software sector should ease.
– The macroeconomic factors mentioned before that have put pressure on the growth of the broader software sector are expected to ease in the coming year. Further, Generative AI will likely be integrated into enterprise software, as companies prefer using AI embedded in external vendor applications rather than developing their own tools. This trend is anticipated to drive significant growth in the software industry.
– Considering these factors, we have a very positive outlook on the Nordics B2B software sector for this year. And we remain very confident in the transformational capabilities that enterprise software brings to the broader economy.
“Our portfolio is built for resilience”
While many industries are feeling the strain of geopolitical uncertainty, the software sector remains relatively resilient, Bäckman explains. He believes the direct impact is likely to be limited, though trade tensions may also create ripple effects, particularly in specific verticals and end-markets.
- In uncertain times, sustainable and profitable growth becomes even more critical, and software vendors must prove their value by maintaining strong customer relationships, optimizing pricing strategies, and adapting to shifting budget constraints.
For Main’s B2B software companies, which focus on mission-critical business processes, the outlook remains stable.
- Our portfolio is built for resilience, and while we stay vigilant, we don’t see major disruptions ahead, Bäckman concludes.