HgCapital invests £11.7m in Empyrean Solutions
HgCapital Trust (HGT) says that it will invest approximately £11.7m in Empyrean Solutions, which it describes as a leading provider of risk and performance management software for financial institutions, alongside other institutional clients of Hg investing through the Hg Mercury 4 Fund. Hg says that the transaction follows a period of rapid growth and scaling, where Empyrean has emerged as a leading provider of integrated risk and performance management solutions for financial institutions. It adds that the new funding will enable Empyrean “to accelerate its product roadmap investments to address more ‘Office of the CFO’ software solutions, designed specifically for financial institutions, as well as expand sales and marketing to keep up with growing demand”.
HGT says that, following the transaction, its liquid resources available for future deployment (including all announced transactions and the interim dividend paid in October 2024, and the £347m undrawn balance on the bank facility) are estimated to be £418m (17% of the pro-forma 30 September 2024 NAV of £2.4bn). It also says that the investment in Empyrean Solutions will reduce HGT’s outstanding commitments to invest in Hg transactions to approximately £681m (28% of the pro-forma 30 September 2024 NAV).
The Empyrean management team and current investors, TechVenture Investors and Spectrum Equity, will all remain shareholders in Empyrean. Spectrum Equity will also participate alongside Hg in the new transaction.
What does Empyrean Solutions do?
Hg says that Empyrean’s platform solves mission critical challenges for finance teams at financial institutions, who historically have had to navigate large quantities of siloed data, antiquated software applications and slow, static modelling. With a modern, cloud-based platform where banks and credit unions of all sizes can connect and process massive data sets – spanning loans, treasury & funding positions, deposits and general ledger information all at a transaction level – Empyrean is transforming the ‘Office of the CFO’ for financial institutions.
Empyrean originally started as a specialist in Asset & Liability Management (ALM), but its platform now spans Budgeting and Planning, Profitability, Data & Analytics and many other key functions for the finance teams of financial institutions. Hg says that, with superior technology, deep domain expertise and a relentless focus on driving innovation, Empyrean is helping the CFO and their teams to navigate complex economic and regulatory environments, optimize their financial performance and make informed strategic decisions.
Hg notes the following financial and operational milestones:
- Empyrean has grown revenue at 40% per year since 2017 through a combination of new customer adds and existing customers adopting additional software modules.
- 270 total software customers — spanning small, mid-sized and large financial institutions — as of end of October 2024, including 70 new customers added over the last 12 months alone.
- 110 customers have adopted Empyrean’s newly launched Budgeting and Planning module in the first year since launch.
- ALM RiskTech Quadrant Category Leader and Category Winner for Financial Planning & Budgeting award by Chartis Research as part of its 2024 Chartis RiskTech 100 Awards.
- Recent addition of Ed Young, industry expert and former Fed risk specialist, who joins as Managing Director with a mandate to expand Empyrean’s growing base of banks with $100bn+ in total assets.