Palico, a platform that connects accredited investors with fund managers and sellers of secondary stakes, has secured $7.3 million in a third round of funding, bringing the total amount raised since its launch in May 2012 to $19.2 million.
The majority of the new financing will be used for marketing, including conference sponsorships and advertising. Some will also be used to further enhance the technology behind the platform.
Investors included European high net worth individuals as well as US and UK private equity professionals. Antoine Drean, founder and CEO of Palico, noted in an interview that the firm didn’t raise money from technology venture capital funds.
Palico has about 15,000 members in 70 countries who use the company’s platform to discuss and contact peers within private equity and to find fundraising, co-investment and secondary opportunities. The firm charges members €500 a month.
“Palico is like a dating site for private equity,” said Drean. “It’s a lead generating tool.” He added that such a platform is even more needed in the secondaries market than in the primary private equity market, considering its opacity.
The market for private equity intermediary technology platform has become competitive recently with new platforms launching on a regular basis. But Drean believes that private equity players aren’t ready yet to conduct transactions directly over the internet, a model that many of Palico’s competitors are pursuing. He declined to name of Palico’s competitors.
“Private equity is very human intensive and there are lots of tailored-made deals,” he said.
Palico isn’t profitable yet but Drean anticipates it could start turning a profit within a year.