Verdane Invests $65M in Meltwater: The Rising Media Monitoring Startup

The investment is coming by way of Verdane taking a substantial stake Fountain Venture, the investment vehicle controlled by the founder and current chairman of Meltwater, Jørn Lyseggen. Joakim Kjemperud, a principal at Verdane, said the deal also gives his firm a stake in an HR firm, Jobylon, although Meltwater is by far the bigger asset. In that context, it’s notable that Verdane opted to invest in Fountain Venture rather than directly in Meltwater. That will give Verdane not only the stake in Meltwater, but also a stake in Jobylon and whatever else Fountain and Lyseggen find interesting. Meltwater built AI in-house and has acquired a stream of businesses in an analytics consolidation play.

Meltwater, known for its expertise in media monitoring and business intelligence using advanced technologies such as AI and big data analytics, has secured a new investor. Verdane, a Norwegian private equity firm with a recent $1 billion+ fund dedicated to supporting growing tech companies, is acquiring an 11% stake in Meltwater. This investment values Meltwater at €542 million ($592 million), making Verdane’s stake worth approximately $65 million. But this is just one part of a larger transaction taking place.

The investment is being made through Verdane’s acquisition of Fountain Venture, the investment vehicle owned by Meltwater’s founder and current chairman, Jørn Lyseggen. Earlier this year, Meltwater, formerly a publicly traded company on the Norwegian stock exchange, went private in a deal with private equity firms Altor and Marlin. Lyseggen opted to keep his remaining shares through Fountain Venture. This private transaction resulted in a valuation of €542 million, the current value cited by Meltwater. Verdane chose to invest in Fountain Venture rather than Meltwater directly in order to establish a partnership for future investments in AI-focused startups.

Joakim Kjemperud, a principal at Verdane, shared, “The deal here is that it’s very much a portfolio transaction. We’re buying into Jørn’s investment company and gaining a direct stake in Meltwater, as well as Nordic HR firm Jobylon, although Meltwater is by far the larger asset.” Jobylon currently generates around €5 million in Annual Recurring Revenue (ARR), while Meltwater, founded in Norway but now headquartered in San Francisco, boasts an impressive ARR of €500 million.

This venture highlights two important trends in the European tech and venture capital industries.

  • The first being that tech companies are facing immense pressure on their valuations. Meltwater’s current market cap of under $600 million is lower than the amount the company raised while still privately held (over $700 million, according to PitchBook data). It also falls short of the valuation from its IPO in December 2020, where the company was valued at over $1 billion.
  • The second trend is the mentality surrounding dealmaking, as investors seek to mitigate risk. Currently, the European market is in a tight spot, with Atomico’s annual report on funding revealing a 50% decrease in funding in 2023, down to just $43 billion. As a result, private equity firms are playing a larger role in investments, looking to make up for the decrease in venture capital.

In this context, it’s worth noting that Verdane chose to invest in Fountain Venture rather than Meltwater directly. This not only gives Verdane a stake in Meltwater, but also a stake in Jobylon and any other companies that Fountain and Lyseggen find promising. This approach diversifies their focus beyond one single business. Verdane has recently expanded its investments to cover all of Europe and even beyond, thus partnering with a seasoned professional allows them to take a safer, yet ambitious approach.

Technologically, companies like Meltwater are at a crucial turning point. Previously, their roots could be traced back to the days when people would manually sift through stacks of newspapers every day, compiling mentions of a company’s name for clients searching to gain insight on their media coverage.

The digitization of print media has made this process easier, and the emergence of social media has expanded the scope to include sentiment analysis and structured (and often unstructured) data. With new tools and methods to extract insights from this data, what was once primarily a media challenge has now become a technical one. Meltwater has developed AI capabilities in-house while also acquiring multiple businesses to consolidate analytics offerings. One notable acquisition was DataSift, a pioneering firm that supported Twitter in monetizing their firehose before the relationship soured.

But even with these advances, companies like Meltwater are facing fierce competition from the likes of OpenAI and their groundbreaking generative AI models. These innovations could completely change the game, not only for consumer search but also for enterprise solutions and business intelligence.

Lyseggen acknowledges this threat but remains confident in Meltwater’s ability to thrive in spite of it. He explains, “I see OpenAI’s ChatGPT as the ‘Netscape moment’ that ushered in this new era. AI is transforming the landscape, enabling players to challenge established companies. I believe Meltwater’s tech is already the most cutting-edge in its category, and we will continue to invest in AI, which excites us greatly. We are determined to push forward.” Today, Meltwater processes an astonishing 1 billion documents a day for clients in various industries, from communications and marketing to public relations.

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Ava Patel

Ava Patel is a cultural critic and commentator with a focus on literature and the arts. She is known for her thought-provoking essays and reviews, and has a talent for bringing new and diverse voices to the forefront of the cultural conversation.

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