RHO ACCELERATION

Thesis

Rho Acceleration, a division of Rho Capital Partners, focuses on control or joint-control investments in transitional middle-market technology companies. The fund targets privately-owned companies that are founder-owned, VC/PE-backed, or corporate spin-outs, primarily in the United States. Rho Acceleration invests in software, digital media, marketplaces, and tech-enabled businesses, including both B2B and B2C solutions, with a particular interest in SaaS, advertising, content, content marketing, and human resources. The fund aims to align the interests of all stakeholders by simplifying the capital structure and embracing a shared vision for the future of the company. They make significant minority or control recapitalization investments, primarily used to accelerate organic growth by investing in new products and markets, and they also pursue scale acceleration through inorganic acquisitions. Rho Acceleration targets opportunities constrained due to complicated capital structures and/or investors seeking liquidity. They typically target companies with $15-100 million in revenues, growing in excess of 10%, and with modest burn rates or profitability. Gross margins should be greater than 50% with the potential for EBITDA margins greater than 25%.

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