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Piper Jaffray Raises $130M to Invest in Commercial-Stage Businesses

The investment fund, referred to as “Fund II,” will be managed by the Minneapolis-based investment bank and asset management firm’s merchant banking unit.

Piper Jaffray Raises $130M to Invest in Commercial-Stage Businesses

Investment bank and asset management company Piper Jaffrey announced Wednesday the closing of a $130 million round for a new growth equity fund, dubbed Piper Jaffray Merchant Banking Fund II. Fund II will be used for investments into commercial-stage businesses with the intention of making senior equity and equity-linked investments of up to $15 million per company.

Piper Jaffray said the focus of Fund II would be on health care, technology, business services, consumer, and financial technology.

Companies selected for the portfolio will generally need to have a defined three-to-five-year timeframe to liquidity, while showing strong growth prospects. Management teams will also play a factor in where Piper Jaffray invests, the firm said.

“Fund II will leverage Piper Jaffray’s personnel, expertise and relationships to find exceptional growth company investments, accelerate the path to success for each company and help guide each company to a successful exit,” said Tom Schnettler, managing director of Piper Jaffray Merchant Banking, in prepared remarks. “We are very pleased to close Fund II and thank all of our limited partners – both returning and new – for their support and confidence.”  

To date, the Merchant Banking team has made 25 investments overall, and generated 13 liquidity events. With the addition of Fund II, and two previously established growth equity funds, Piper Jaffray Merchant Banking now manages $275 million of invested capital.

For Fund II, since the fund’s initial closing in late 2017, investments have already been made into three companies:

 

  • Cafe Rio – A Utah-based Mexican fast-casual restaurant company boasting a policy of fresh, 100 percent made-from-scratch foods. It operates more than 100 units, primarily in western U.S.
  • HemaSource – A medical disposables distribution business, which specializes in plasma collection and other services for the ambulatory healthcare markets. Based in Utah, the company is known for an approach involving proprietary inventory management software and data analytics.
  • Foodsby – A Minneapolis-based online meal ordering and bulk delivery platform catering specifically to corporate needs.

 

Piper Jaffray Merchant Banking actually led a recent Series B funding round launched by Foodsby in August. It was joined by four other investors in the $13.5 million round.

The Fund II closing and recent investments come less than a year after a leadership change at Piper Jaffray. Chad Abraham replaced Andrew Duff as CEO and Deb Schoneman succeeded Stuart Harvey Jr. as president. Those appointments went into effect January 1, 2018.

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