Francisco Partners Acquires Cloud Commerce Provider Avangate

Avangate, which focuses on providing commerce solutions as cloud services and SaaS, has been acquired, but not by another cloud company or an IT solutions provider. Rather, a technology-focused private equity firm has stepped up and purchased the company for an undisclosed amount of money.

Francisco Partners is a global private equity firm that has invested in more than 100 technology companies since it was founded a decade ago. And, according to the company, it acquired Avangate because of the cloud company’s leadership position in the digital commerce area.

Through the acquisition, Francisco Partners adds Avangate’s software, SaaS and cloud services to its portfolio of companies and technologies. The goal seems to be to enable its more than 3,000 customers to increase their online sales, manage subscription billing, grow reseller and affiliate distribution networks, and reach new global markets.

The backing of the multi-billion-dollar private equity firm puts Avangate in a good spot for continued growth and the further development of its cloud offerings.

“With Francisco Partners we have found an investment partner that shares our customer-centric vision. Their investment and support further accelerates Avangate’s vision to be a high growth public company, as well as opens a variety of additional market options,” said Carl Theobald, CEO of Avangate, in a prepared statement.

Theobald explained buy behavior has shifted at traditional companies because of the explosion of customer touch points; and that’s driving the need for a rethink of commerce products. Theobald calls the shift “business-to-individual,” which basically means taking a customer-centric focus to commerce products and services.

It’s that functionality and focus that seems to be what attracted Francisco Partners to Avangate. However, what this will mean over the long term for Avangate and its channel partners is unknown. Avangate turned to the channel two years ago, and then expanded its channel sales to mobility in the spring.

It’s likely Francisco Partners will continue to work with the Avangate channel, but neither company mentioned partners in the acquisition announcement.