The Palatine Growth Credit Fund has launched its inaugural deal, marking a significant milestone with a loan package to StorMagic, an edge computing provider based in Bristol. This move comes just after the fund’s final closure in May. The loan aims to propel StorMagic’s growth and help organisations store, manage, and protect data effectively from the edge.
StorMagic, founded in 2006, offers cost-effective alternatives to giants like VMware and Microsoft. The company, with offices in the USA and Canada, focuses on small and medium-sized businesses. Meanwhile, Palatine’s investment strategy targets high-growth sectors including cyber, fintech, and health tech across the UK regions.
The Deal and Its Impact
The Palatine Growth Credit Fund has successfully executed its first deal, providing a loan package to StorMagic, a Bristol-based edge computing provider. This deal follows the final closure of the fund in May and is expected to significantly boost StorMagic’s growth. The company enables various organisations to store, protect, and manage data effectively from the edge.
StorMagic’s Market Position
Established in 2006, StorMagic offers a cost-effective alternative to major players like VMware and Microsoft. The company has a strong international presence with offices in the USA and Canada. It focuses on providing lower-cost solutions for small and medium-sized businesses (SMBs) looking to reduce operational costs while maintaining reliable on-site applications.
Palatine’s Vision
Primarily a mid-market private equity investor, Palatine aims to support ‘maturing, high growth companies’ across the UK. The firm has shown a keen interest in sectors like cyber, fintech, SaaS, health tech, medtech, AI, and advanced manufacturing. These sectors are booming across technology ecosystems in regions such as the North, Midlands, South West, and South East.
Leadership and Expertise
In February 2024, Palatine appointed Ryan Sorby as Partner and Head of the North. Sorby adds to the firm’s leadership, joining Head of Growth Credit Will Chappel and Non-Executive Chair Neil Pitcher. Pitcher is the former CEO of European Venture Partners, now known as Kreos Capital. The leadership team brings a wealth of experience and expertise to guide the fund.
Comments from Leadership
Will Chappel expressed enthusiasm for the deal, stating, ‘StorMagic is a fantastic business with a meaningful USP and an impressive international client base.’ He highlighted the growing importance of innovative, secure, and fast connectivity for many organisations.
Dan Beer, CEO of StorMagic, commented on the competitive landscape following Broadcom’s acquisition of VMware. He mentioned that edge and SMB customers are experiencing significant price hikes and are looking for more cost-effective solutions. According to Beer, StorMagic’s SvHCI can save these customers up to 62% compared to VMware alternatives.
Potential for Future Deals
With this first successful deal, Palatine’s Growth Credit Fund is poised for more investments. The sectors targeted by the fund offer numerous opportunities for high returns. This initial success is a promising indicator of future performance.
Palatine’s approach is methodical, focusing on sectors that show considerable growth potential. This ensures that the investments are not only high-yield but also sustainable in the long run.
Significance for the South West
The deal marks a significant milestone for the South West’s burgeoning tech scene. It underlines the region’s potential for attracting substantial investments and fostering innovation.
StorMagic’s growth can serve as a catalyst for other tech companies in the region. Successful investments like these can draw more attention to the South West, making it a hotspot for technology-driven growth.
The availability of growth credit funds can provide the much-needed financial boost for emerging tech firms. This can lead to a more vibrant and dynamic business environment in the South West.
Future Outlook
Palatine has laid a strong foundation with this first deal, setting the stage for future successes. The targeted sectors and strategic leadership indicate a well-thought-out approach to investments.
The fund’s focus on high-growth sectors ensures that it is well-positioned to tap into lucrative opportunities. This can result in substantial returns for investors and significant growth for the companies involved.
Conclusion
The first deal by Palatine’s Growth Credit Fund is a promising start. It showcases the potential for substantial growth and investment in the UK’s technology sectors.
StorMagic’s success with this loan package could set a precedent for future deals. It highlights the role of growth credit in supporting high-potential companies, especially in the tech industry.
The first deal by Palatine’s Growth Credit Fund is a promising start. It showcases the potential for substantial growth and investment in the UK’s technology sectors.
StorMagic’s success with this loan package could set a precedent for future deals. It highlights the role of growth credit in supporting high-potential companies, especially in the tech industry.