Wellington Financial portfolio co. FolioDynamix being acquired for $200M

We got some great news earlier today for our limited partners. New York-based FolioDynamix is being acquired by NASDAQ-listed Actua (ACTA:Q) for ~US$200 million. It was only the Spring of 2012 when we joined VCs ABS Capital and Edison Partners in the Folio Dynamics Inc. syndicate. What Folio Chairman and CEO Joe Mrak and his team have built clearly drew attention in a relatively short timeframe. And Actua, which calls itself the multi-vertical cloud company, had to have it.

FolioDynamix supplies a cloud-based technology platform to manage the full wealth management lifecycle for wealth service providers and investment advisors. It works across all account types including unified managed accounts and unified managed household programs. The company’s technology is complemented with institutional-quality research, content and consulting expertise delivered by its subsidiary, FDx Advisors, a registered investment advisor. FDx provides clients with due diligence and discretionary investment solutions regarding managers / models used to support separately managed account unified managed accounts, mutual fund wrap and exchange traded fund programs.

In operation since 2007, Folio’s clients include banks, money management firms, brokers and so forth. Examples include Cambridge Investment Research, LPL, Raymond James and Wedbush.

The management team has been very efficient with its investment capital over the years. Which is code for: this is a big win for the Folio team and their VC partners. ABS and Edison came did their round in late 2010, are were very much committed to the deal when the opportunity arose for a venture debt tranche. The role and benefits of venture debt was clear: provide capital at an important time without the meaningful dilution to the management team that would result from a VC follow-on. For the VCs, they got to keep their powder dry and improve their own multiple of capital on an exit.

From its vantagepoint, Actua gets “a current net revenue run rate of over $30 million (approximately $50 million on a gross revenue basis), with positive earnings and cash flow. [Folio] grew over 40% in 2013, and growth is expected to continue at that rate in 2014.”

Congrats to Joe, CFO Mark Herman, CTO Mark Davis, the Folio family and the teams at ABS (Cal Wheaton) and Edison Ventures (Chris Sugden).

MRM