Resurge Growth Partners has unveiled a new venture equity vehicle in a bid to bridge the gap between venture capital and private equity for high-potential European and Israeli scaleups.
The firm will invest over €120m (£100m) via the vehicle over the next three years, with nearly half of the capital already committed from the founding GPs and a leading family office.
The Kentish Town-based business has said its mission is to partner with so-called “venture graduates” – high-potential companies that have outgrown the venture capital model but are not yet mature enough for traditional private equity. Through their venture equity model, Resurge will provide the capital, operational expertise and time needed to transition a company away from the VC funding model and move them to a path of profitable, sustainable growth.
Resurge was founded by Oren Peleg, former Managing Director of Oaktree Capital Management and former CEO of international gym chain Fitness First. He is joined by co-founder Eyal Malinger, former Partner at Beringea and former Vice President at Oaktree Capital.
Oreg told UKTN: “If you look at a typical venture portfolio, there will be a proportion of that portfolio that has delivered high growth and is likely to become sizeable — a unicorn. Then there is a proportion of companies in the portfolio that don’t achieve market fit and fail and they typically don’t deserve to be funded anymore.
“But then there is a group in the middle who find themselves in a position where they can no longer deliver growth which is sufficiently attractive to venture to continue to be funded, but who are also turned down by the private equity world who say they’re not profitable enough and are not generating enough cash — and then they’re stuck.
“These are the companies that we support and we believe there’s a gap in the market because these companies are struggling to find a partner that’s willing to fund them.”
Nearly half of Resurge’s capital has already been secured via GP commitments and the backing of a leading family office. The remaining funds are sourced from a select group of family offices and high-net worth individuals who are committing capital on a deal-specific basis. With this foundation, Resurge plans to be able to onboard its first portfolio companies by the end of the year.