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With a cumulative experience of over 50 years in spearheading successful SMEs, the multicultural team at Moonbase Capital, under the leadership of Managing Partner Ibrahim Abdel Rahim, has achieved remarkable success. Prior to investing, Ibrahim led an SME himself to a notable exit after scaling sales by a factor of 17 over 10 years.
Since delving into SF investments in 2020, he has played a pivotal role in nearly 40 search fund entrepreneurs, culminating in 6 acquisitions. While the bulk of their SFs are European-based (spanning Ireland, Spain, France, Germany, the UK, among others), Moonbase has also lent its support to ventures like Hounds Bay Capital in the USA and M-Capital in Japan.
Headquartered in Barcelona, the investment firm is reaffirming its commitment to SFs and is currently raising €15M to invest across Europe.
In addition to the five acquisitions made in 2023 -Italian Caris Servizi, German EQ Photonics, and the two French companies, CW Group & ASP Group, and Leaseir in Spain-Moonbase has kicked off 2024 with a new acquisition, Dedicom in Germany.
Furthermore, in this year’s initiatives, Moonbase has backed the following SFs: Aquilae Relevo, WildLynx Capital, and Criluz Capital in Spain; Sailly Transmission in France; Aspeon Partners in Austria; Inu Capital in the USA; Heritage Investments in the Netherlands; and DS Mittelstandspartner in Germany.
SFNews: When do you expect the first closing (and for how much)?
IAR: We already had the first closing more than a year ago for €5M and we reached €9M already. We expect to close $15M by end of the year.
SFNews: While initially focused primarily on Europe, you have made forays into the USA and Asia. Are you looking to expand your geographic focus further?
IAR: At this point in time, not, as our focus is mainly on Europe. For the very near future, yes, we are looking expanding our focus on LATAM, Asia and the push harder in the US.
SFNews: How do you perceive the current market regarding fundraising for a fund? Are there many competitors in Spain? Do you think there are too many players chasing too few deals?
IAR: From my experience fundraising in Europe has gotten more difficult for searchers. Every year there is a large influx of new searchers however the number of investors has remained the same. Several searchers that I’ve spoken to over the past 3-4 months have told me that they often struggle to raise, specifically from institutional investors. However the best searchers are often able to close their cap table quickly, the capital is still in the market but the demand is outpacing the supply.
On the topic of sourcing deals, Spain is a particular case. It is getting a bit competitive and many companies have already been approached several times by searchers. This does not mean that deals don’t exist, sometimes perhaps a deal did not go through because the searcher was not a good fit or perhaps the owner was not ready to sell yet.
We still believe there are more than enough SMEs in Spain for the current SF landscape and that there is room for growth.
SFNews: SFs are experiencing growth in all European countries, such as France, Germany, Poland, Italy, etc. What is your assessment of the market’s current state?
IAR: As of late, Germany has captured our attention. German SMEs are more sophisticated than the European average, especially in terms of technology and software infrastructure. They already have standard operating procedures in place, leaving fewer low-hanging fruits for improvement for searchers post-acquisition. Nonetheless, the fact that most companies have more established organizational structures and ERPs streamlines the transition process, rendering it notably smoother.
France also holds a significant appeal for us. I am on the boards of two companies in the country. Compared to Spain, France’s business environment is more brokered. The is an abundance of SMEs and the market offers ample room for expansion.
Italy remains on our radar with one successful acquisition underway and a quest for further opportunities.
The Netherlands is interesting. A sudden surge of SFs. Still to be seen how successful they will be.
I’d also like to mention Poland, as we just committed to Bold Capital led by Przemek Krempaszanka. As one of Europe’s fastest-growing economies, Poland presents an attractive investment destination, with many companies outsourcing work to the country. The integration of Poland with the broader EU market signifies a promising opportunity. Moreover, the availability of highly skilled yet cost-effective labor adds to its allure.
SFNews: What makes MC different from other investors?
IAR: We set out to be truly searcher-focused and we built Moonbase Capital around this ethos. Our core philosophy is that the best outcomes arise from synergistic partnerships between investors and entrepreneurs. We maintain regular communication with our searchers, whether monthly or as frequently as required, providing them with guidance, resources, and sometimes just the encouragement needed to persevere.
We also built an Advisory Board to assist our searchers through various phases, from the initial search and acquisition to the subsequent transition. We have a network of 50 who come from a wide area of geographies, industries functions, and we match them with entrepreneurs depending on their needs. For example, an entrepreneur in the automotive sector would be paired with an advisor possessing over 30 years of experience in the field to offer specialized advice on company selection and strategic decisions.
Moreover, we’ve created a Searcher Forum, a community where our searchers can interact, share best practices, seek advice, and discuss entrepreneurial challenges. The forum promotes a culture of openness and vulnerability sharing, which is very healthy for entrepreneurs who handle huge amounts of pressure.
In addition to supporting our entrepreneurs, we are committed to enriching the broader ecosystem. Our efforts include publishing a variety of resources on our website and LinkedIn page, such as a White Paper, industry reports, expert interviews, all designed to contribute to the ongoing success of the search fund community.
After all, we are former entrepreneurs ourselves, so we know how to support other entrepreneurs.
