Meltwater, a company renowned for its media monitoring and AI-powered business intelligence, has attracted new investment. Verdane, a Norwegian private equity firm, recently closed a fund over $1 billion for tech company investments and is now acquiring an 11% share in Meltwater. This transaction values Meltwater at approximately €542 million ($592 million), making Verdane’s stake worth around $65 million. However, Verdane’s investment is indirectly through a significant share in Fountain Venture, the investment firm run by Meltwater’s founder and chairman, Jørn Lyseggen.
Previously, Meltwater was publicly traded on the Norwegian stock exchange but went private again earlier this year. The private buyout was orchestrated by Lyseggen along with private equity firms Altor and Marlin, with Lyseggen retaining his share through Fountain. Verdane chose to invest in Fountain Venture to collaborate on future AI-related startup investments.
Joakim Kjemperud of Verdane highlighted the deal’s nature, noting it involved buying into Lyseggen’s investment firm, thus gaining indirect stakes in Meltwater and Nordic HR firm Jobylon. Jobylon’s current annual recurring revenue (ARR) is about €5 million, while Meltwater’s ARR, headquartered in San Francisco, stands around €500 million.
This transaction reflects two key trends in European tech and venture capital. First, tech companies are facing significant valuation pressures. Meltwater’s current market cap is under $600 million, below its private fundraising total and far less than its initial public offering valuation in December 2020, which exceeded $1 billion. Second, it illustrates the cautious approach of investors in a tight market, with firms like Verdane seeking to mitigate risks by diversifying their investments.
Regarding technology, Meltwater is navigating a changing landscape. Initially, media monitoring involved manually clipping newspaper mentions, but digital and social media have transformed this into a broader sentiment analysis and data challenge. Meltwater has responded by developing in-house AI and acquiring analytics firms, including DataSift. However, new competitors in generative AI, like OpenAI, are introducing fresh challenges in search and business intelligence.
Lyseggen remains optimistic about Meltwater’s prospects, comparing OpenAI’s ChatGPT to the ‘Netscape moment’ in terms of transformative impact. He believes that Meltwater, with its focus on AI, is well-positioned to adapt and thrive in this evolving environment. Currently, Meltwater analyzes about 1 billion documents daily for clients in communications, marketing, and PR.