• Unicorn does not need more fundraising to finance its growth
• IPO is the likely exit option

Factorial, a Spanish unicorn that offers management software to small- and medium-sized enterprises (SMEs), will complete its growth with acquisitions, CEO and co-founder Jordi Romero told Mergermarket.

The Barcelona-based company executed its first deal this year and is looking for further acquisitions in Europe (Spain, France, Italy, Portugal, Germany, the UK), the US, Brazil and Mexico, Romero said. The company is already present in these countries, which have a strong growth potential, he added.

Factorial would be interested in buying companies that have raised funds up to Series A, Romero said, adding that targets will usually have up to EUR 10m in revenues. Possible targets should be working on the management software sector, such as financing management or IT management, he added.

“We are interested in team, product and clients portfolio,” Romero said. The company was founded as a human resources (HR) tech provider and wants to grow horizontally offering more services to SMEs with between 10 and 100 employees, he added.

The company could finance deals with cash, shares or debt, Romera said. He declined to give an exact revenue figure but said that it is over two digits in terms of millions of euros but it has not reached the three digits yet. The company has yet to generate positive EBITDA, he added.

Factorial acquired the Spanish company Fuell in October. “Fuell is a small company and its acquisition was a learning process for us and we have seen that we can do it,” Romero said. Factorial financed this acquisition with cash and shares, he added.

Factorial worked with Gomez-Acebo & Pombo as its legal advisor on the deal, Romero said. The company analyzes the market with an in-house M&A team but it is interested in receiving approaches from advisors who have sale mandates, he added.

Meanwhile, the company is not planning further fundraising after having closed a USD 120m Series C last year, Romero said. The company had a post-money valuation slightly above USD 1bn in the round, he added. Atomico and GIC led the fundraising, he added. Previous venture capital (VC) investors such as CRV, Tiger Global, K-Fund and Creandum also invested in that round, he added.

Factorial is not looking for a sale and sees an IPO as the main exit option for its investors, Romero said. “We are not preparing the company for an IPO and it is an option for the future,” he added.

The company has a score of 15 out of 100, according to Mergermarket’s Likely VC Exit predictive algorithm.*  The score reflects the VC exit rate for the region.

*Mergermarket’s Likely VC Exit predictive analytics assign a score to VC-backed companies to help track and predict when an exit could occur through M&A, an IPO, a direct listing or a deSPAC transaction.