PitchBook specializes in compiling venture capital, IPO and M&A data on tens of thousands of companies, offering investors, journalists and analysts a treasure trove of information about the latest deals and investment activity.
Now, the Seattle-based company has become its very own data point.
Financial information juggernaut Morningstar announced this morning that it intends to purchase the remaining shares of PitchBook that it did not already own for $180 million. The transaction values PitchBook — which employs more than 600 at offices in Seattle, New York and London — at $225 million.
Morningstar invested $10 million in the company earlier this year, bringing total funding in the 9-year-old company to just $14.25 million. It also helped seed the company’s early days with a $1.2 million investment in 2009, and owned about 20 percent of PitchBook prior to today’s announcement.
Given the small pool of initial capital invested in PitchBook, the deal represents a fantastic return for the company. As part of the deal, PitchBook will retain its brand, and founder and CEO John Gabbert will remain at the helm.
“I reached out to Morningstar as a potential investor seven years ago because I admired the company’s entrepreneurial spirit and innovative products,” Gabbert said in a statement. “Joining forces with Morningstar will help us enter into our next stage of growth, including developing the next-generation version of our award-winning data and software platform, investing in our world-class sales and customer support functions, and expanding our business in Europe and Asia.”
The acquisition also follows a nice coup for PitchBook, which announced last month that it had formed an alliance with the National Venture Capital Association to be the official data provider of the organization, launching a new report called VentureMonitor.
There’s certainly no shortage of venture capital, M&A and IPO research on the market these days, and other organizations such as CB Insights; Dow Jones and PwC offer their own quarterly reports, chronicling the action in the private equities market.
Even still, Gabbert has been in the venture capital and private equity data business for a long time, and before founding PitchBook he led the team behind the VentureSource investment report. He then founded PitchBook in 2007 in the midst of the financial crisis, a move that Gabbert told GeekWire three years ago was not a mistake.
“Timing was definitely an uphill battle, but the greatest achievements are typically those that defy the odds in some way,” he said.
That vision certainly resonated with Morningstar, whose president, Kunal Kapoor, has sat on the board of PitchBook since 2012. In a statement. today, Kapoor said that Morningstar and PitchBook share a vision of bringing “transparency to the investment landscape.”
“PitchBook is in a great position to continue its strong growth trajectory as private markets and private companies are areas of rapidly growing investor interest,” Kapoor said. “Data has always been Morningstar’s sweet spot, and we look forward to working with PitchBook to help investors and advisors better understand and navigate this evolving area of the market.”
PitchBook has built a huge collection of customers in recent years — some of the biggest names in venture capital and private equity — who rely on its reports to analyze the often opaque world of private financial transactions. The company, which now boasts 1,800 customers, posted $31.1 million in revenue for the trailing 12 months ended June 30, 2016.
All employees are expected to stay with the company after the deal closes, which is slated to occur later this year. In an email to GeekWire, Gabbert said that Morningstar will allow PitchBook to “access and scale into a broader market” such as public equity, debt and hedge funds.