(Bloomberg) — Private equity firm Vector Capital is closing in on deal to buy SingleStore, a database startup backed by the venture arms of Google and Dell Technologies Inc., according to people familiar with the matter.
Vector and its co-investors are investing about $500 million in equity in SingleStore, the people said, asking not to be identified because the matter is private. An announcement could come as soon as Wednesday, they added.
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SingleStore’s valuation in the buyout couldn’t be learned. After a 2022 funding round led by Goldman Sachs Asset Management, the San Francisco-based company was valued at $1.3 billion, according to data provider PitchBook.
Google Ventures, Dell and IBM will remain investors, alongside other Vector backers such as RELX Plc REV Venture Partners, the people said. Representatives for Vector, SingleStore, IBM, Google and Dell, REV either declined to comment or couldn’t be reached.
Led by chief executive officer Raj Verma, SingleStore’s database technology helps companies access data when they need instantaneous info, such as when a credit-card company detects a potentially fraudulent transaction and wants to notify a customer.
The company said last week that it had annual recurring revenue of $123 million at the end of the second quarter, which was up 23% year over year, and more than $150 million in cash.
The deal is a so-called growth buyout, in which Vector had to negotiate separately with all of the shareholders who invested in different rounds along the way, the people said.
Vector has been pursuing these kinds of buyouts in recent months, following the return of Amish Mehta to the firm last year.
Mehta, chief investment officer and a managing director, said in an earlier statement that he’s focused on “valuation resets across venture capital-backed software companies.”
Those resets come after money had poured into software startups in 2021 and 2022, inflating valuations across the sector.
Vector completed its take-private deal for Bigtincan Holdings Inc. in April. Last month, Vector agreed to acquire Showpad, which it plans to merge with Bigtincan.
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