Angel investors make hair-raising return on salon software firm Phorest

A few lucky angel investors have made up to a tenfold return on their investment in Irish software firm Phorest after less than seven years.

It comes after the company recently raised €20 million in funding from US investment group Susquehanna Growth Equity (SGE).

The SGE investment facilitated a buyout of, and a healthy return for, eight of the initial investors who backed Phorest through the Halo Business Angel Network (HBAN), a body which serves as a go-between to bring start-ups and investors together.

Phorest, which provides management software for hair and beauty salons, raised €700,000 from 12 HBAN angel investors in two funding rounds in 2011 and 2013. Three investors were recently fully bought out while the remaining five opted for a partial buyout, meaning they still retain some shares in the company.

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The Phorest deal was the first co-investment between two HBAN syndicates.

Ronan Perceval, who co-founded and leads Phorest, said angel backing was critical to the company's success.

Expertise

“Investors often tell you the cliché that they bring more than money, but in this case it was true – many of the angels brought unrivalled expertise and invaluable advice in relation to structuring and scaling the business from €1 million revenue to €13 million,” said Mr Perceval.

Phorest has more than 4,000 clients in Ireland, the UK, Finland, Germany and the US. The company, which has been growing at about 40 per cent annually, enables salons to take bookings online, manage appointments, roster staff, control stock and implement marketing campaigns and loyalty programmes.

HBAN national director John Phelan said the angel investing market in Ireland is maturing.

“We are seeing deals where our members are now getting substantial returns on their investments, particularly in the information and communications technology [ICT], medtech, life-sciences and healthcare sectors,” he said.