'They showed a deep understanding' of how to grow with data and AI: Focus Group's Goodman on Hg investment, $1bn valuation

Hg's investment will support the reseller’s organic growth plan, M&A ambitions and product development initiatives

British VAR Focus Group has secured investment from private equity firm Hg making it the latest addition to the ranks of Britain's private company unicorns thanks to its new $1bn valuation.

To land the deal, Focus ran a competitive process to find additional investment.

"Hg demonstrated their ability to create value using their extensive experience in backing companies who sell business services to SMEs," Chris Goodman, co-founder and director of Focus Group tells CRN.

"They showed a deep understanding of how to maximise and accelerate growth using data and AI; this has resonated with us as we already have sector-leading data on which we are excited to capitalise.

"Alongside this, we found that we had well-aligned views of the future of the ICT industry, both in terms of product and future M&A opportunities."

Hg replaces the VAR's previous investor, Bowmark Capital, four years after the PE house backed Focus.

Bowmark still have an option to reinvest, Focus told CRN.

Goodman adds that Hg's investment will support the reseller's organic growth plan, M&A ambitions and product development initiatives, enhancing its ability to deliver innovative solutions for the UK SME sector.

M&A has been a big part of telecoms and IT provider's strategy, with four acquisitions in just the past year.

In the last months of 2023 and beginning of 2024 alone, Focus Group added telecoms provider Boxx Communications, healthcare-focused RPM Communications, Bristol-based cloud provider Pinnacle and telecoms and IT specialist Datasharp, to its stable.

Revenues for the year hit £156.3m, an almost 30 per cent increase on last year's figures, which can be largely attributed to a highly acquisitive couple of years.

He says Focus will continue to look for opportunities across the ICT sector.

Founded in 2003 by Ralph Gilbert and Chris Goodman in Brighton & Hove, UK, Focus provides digital workplace solutions to around 30,000 SME customers.

Nick Jordan and Joris Van Gool, Partners at Hg, said: "The long-term trends in small business technology adoption offers Focus Group a great opportunity to continue its impressive growth trajectory by offering a one-stop-shop for ICT for UK SMEs.

"In partnering with the Focus Group leadership and close to 1,000 exceptional colleagues we are excited about the opportunity to build a national champion in this industry."

The financial terms of the deal were not disclosed.