American AI startup Meltwater which specializes in end-to-end media intelligence solutions, social listening, media monitoring, and data analysis through the use of AI, has just secured a $65 million investment from Verdane.

In return, Verdane has gained an 11% stake in Meltwater at a value of $65 million as the AI startup is currently valued at $592 million. Verdane is a Norwegian firm that provides private equity to scaling tech companies. The firm closed its $1 billion fund earlier this year.

Verdane’s investment strategy involves a substantial stake in Fountain Venture, the investment firm overseen by Jørn Lyseggen, founder and current chairman of Meltwater.

Meltwater, having been publicly traded on the Norwegian stock exchange until earlier this year, underwent a transition to private status orchestrated by Lyseggen in collaboration with private equity firms Altor and Marlin. Lyseggen retained his residual shares through Fountain, with the take-private deal constituting the most recent disclosed valuation acknowledged by Meltwater.

Verdane’s decision to invest in Fountain Venture, as opposed to a direct investment in Meltwater, is strategic. The plan entails a partnership with Fountain to jointly engage in future investments, particularly targeting startups operating with AI.

Joakim Kjemperud, a principal at Verdane, noted that as part of the deal, his firm secures a stake in the HR firm Jobylon, with Meltwater significantly overshadowing it as the predominant asset.

He said: “The deal here is that it’s very much a portfolio transaction. We’re buying into Jørn’s investment company and acquiring an implied direct stake in Meltwater and nordic HR firm Jobylon, but Meltwater is the biggest asset in the portfolio.”

Presently, Jobylon boasts an Annual Recurring Revenue (ARR) of approximately €5 million. In contrast, Meltwater, originally founded in Norway and presently headquartered in San Francisco, commands a significantly larger ARR, standing at around €500 million, as highlighted by Joakim Kjemperud, a principal at Verdane.

Despite its present market capitalization hovering just below $600 million, Meltwater’s financial trajectory reveals a historical narrative that goes against this figure. In its earlier incarnation as a privately held startup, the company amassed over $700 million in funding, according to PitchBook data. Furthermore, its market debut in December 2020 saw a valuation exceeding $1 billion, highlighting a notable shift in its financial standing over time.

Via: TechCrunch