At Copilot Capital, we invest in high-quality software businesses that are not yet on the radar of other private equity firms. We specifically target break-even companies which we believe have high growth potential. And once we’ve invested, we bring deep expertise to bear in order to help founders realise this potential.

It’s a different approach to traditional private equity - where investors often require businesses to be profitable before they’ll consider getting involved. However, our knowledge and understanding of the software industry allows us to shoulder more risk.

We know that the recurring revenue model of software companies means we don't need a large profit margin as a safety net, so we can confidently support businesses that are break-even but have significant untapped potential.

Of course, what matters most is what we do after we invest - the partnerships we form with these companies, their founders and leadership teams. We believe there are five key ways in which private equity investors can create value in software businesses, and we concentrate on these five strategies with every investment we make.

1] Driving sales growth

We invest in businesses with exceptional products, but it's common for founders to find themselves still acting as primary salesperson many years into their company journey. We work with these companies on the transition towards a professional sales environment, with less reliance and pressure on the founder, and help build and scale high-performing sales teams to drive growth.

A great example of this in action is SecureFlag , a leader in cybersecurity training. SecureFlag had an excellent product but needed help scaling its sales efforts to match its global potential. We’ve worked alongside the founders, Andrea Scaduto and Emilio Pinna , to professionalise and expand their sales operations, transitioning from founder-led sales to a high-performing professional sales team lead by a new CRO who is growing the sales team and putting in place best in class processes. This has allowed the company to focus on growth in markets beyond the UK, meeting the growing demand for secure coding solutions across the globe.  Similarly, with Relesys we’ve supported Jesper Roesgaard and Jens Ole Lebeck in hiring a new VP Sales, a new VP Strategic Accounts and are actively looking for a further senior sales person to focus on international markets.

2] International expansion

Many of the businesses we speak to are leaders in their home markets. To sustain their growth, they need to expand into new regions, a journey that requires a different mindset, as well as presenting multiple marketing, sales and operational hurdles.

For example, PriceShape , a Danish pricing intelligence firm, was already excelling in its home market, but wanted support to expand across Europe. With Copilot’s help, PriceShape is now entering new markets and using its dynamic pricing tool to transform the retail landscape in multiple regions. We’ve provided the strategic insights and operational guidance to ensure smooth expansion and growth into new territories and are actively exploring opening a new sales and customer success hub in Barcelona.

3] Building an acquisition strategy

Successful software businesses excel in their core fields and are able to nurture deeply loyal customer bases as a result. To accelerate growth, however, they either need to deepen their existing customer relationships or secure more of them.

Acquisitions are often an excellent way to turbo-charge growth to market leadership. When software companies get them right, they allow for rapid scaling, by integrating complementary technologies or customer segments, or in some cases, by literally taking a competitor out of the market. Our job is to help founders drive further growth by identifying and executing the strategic acquisitions most likely to propel their businesses forward.  We’re actively supporting PriceShape with this with a number of conversations ongoing hope to make our first acquisition in 2025.

4] Harnessing Artificial Intelligence

At Copilot Capital, we see AI as a critical lever for scaling businesses, and we help our portfolio companies unlock AI’s full potential. PriceShape, for instance, uses AI-driven tools to help retailers adjust prices in real-time. For SecureFlag, AI is also critical. Their AI-powered ThreatCanvas tool offers real-world training scenarios, which we’ve helped them scale to meet rising demand.  Meanwhile, Relesys already has developed a product that can predict employee churn.

5] Prioritising customer success.

We help software companies enhance customer retention by making their solutions more indispensable and exploring ways to provide additional value. This includes assessing and optimising pricing strategies—whether that’s adjusting current pricing or introducing a tiered product offering to cater to different market segments.  A great example of this is SecureFlag, where we have supported the team in rolling out a new pricing strategy for individual users.

Often, businesses have excelled in their core areas but haven’t fully explored opportunities for customer segmentation and value enhancement.

The uplift opportunity

The five areas of opportunity appear time and time again, but not all businesses will need support in every area. Some might already be internationalised, others may have a solid go-to-market strategy but could benefit from accelerated growth or additional capital. For investors, it’s about working out where individual priorities lie, and where the greatest growth can be realised.

Our message to founders is straightforward: you are the experts in your field and understand the opportunities within it. What we bring to the table is scaling expertise and the pattern recognition that comes from having been on this journey many times over.

By supporting these key areas, private equity backing can significantly enhance software business profits and valuations. It’s a partnership that can help founders realise their companies’ full potential far more quickly than going it alone.