Constellation Software launches $200 million venture fund to find potential acquisitions

Constellation Software Inc. has launched a $200 million CAD venture capital fund, called VMS Ventures, saying it will finance startups and rapidly growing vertical market software businesses.

Of those receiving financing, most will either have been incubated or identified by a sponsoring Constellation business unit, according to the company.

Constellation is an international provider of market-leading software and services to a number of industries. The company acquires, manages, and builds other software businesses as well.

The fund intends to invest in startups that have the potential to become standalone business units within Constellation, but will not back any that have to rely upon Constellation for ongoing sales, marketing, and customer support, and development, Constellation management said.

The $200 million will be invested over a three-to-five-year time span. Constellation management said they do not expect the fund to add to the company’s organic revenue growth rate.

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Constellation was founded in 1995 to assemble a portfolio of software companies that have the potential to become leaders in their markets.

Constellation claims 125,000 customers in over 100 countries, and over 25,000 employees. The company is headquartered in Toronto with offices in North America, Europe, Australia, South America and Africa.

Constellation is organized into six separate business units. Each of those units covers a number of verticals, such as communications, healthcare, and payments with each vertical holding numerous, smaller software firms.

Daan Dijkhuizen will act as the fund’s managing partner. In addition to managing the fund, he will continue to be the CEO of the Topicus Operating Group within Topicus.com, but will resign his role as CEO of Topicus.com. In January, Constellation spun out Topicus as a separate public company, listing it on the TSX Venture Exchange in February.

Robin van Poelje will take on the role of the CEO of Topicus.com in addition to his current position as chairman.

Headquartered in the Netherlands, Topicus acquires, develops and manages software platforms, and claims over 100,000 customers in 14 countries.

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