First Round: Secret service

Most of the time, private equity operators like to remain discrete, acquiring firms under the radar of public scrutiny. Well, most of the time anyway. So with that in mind, First Round was intrigued to discover that a Canadian firm that actively encourages married people to commit adultery is on the hunt for new capital and is even talking of a potential listing in London within the next few months.

According to press reports in North America, AshleyMadison.com is urgently seeking new sources of capital due to “booming demand for its services” and after an unsuccessful attempt to list on the Toronto Stock Exchange last year. Bloomberg reports that the adultery website is seeking up to $200 million in new funding to put to work on its rapidly expanding operations.

And demand is evidently booming. The group told Bloomberg that it had seen revenues grow fourfold since 2009.

Now, First Round is no prude, but the site does seem a tad underhand to put it mildly, and its North American advertising certainly doesn’t pull any punches. Moreover First Round was intrigued – if not affronted – to find that the website’s management had plumped for London as the stock exchange where it was most likely to get a successful listing away. It will have you believe that the UK, and Europe more generally, has a more laissez-faire attitude to extramarital affairs than its North American cousins.

Whether the group is ultimately successful, or whether it might find greater success shacking up with the UK’s close neighbours across the English Channel is a moot point. What does seem strange to First Round, is that as far as it knows, not a single private equity group has come to the fore to offer monetary support.

Has the industry suddenly become shy? Or is it simply a case that private equity gets a hard enough time from the press and general public without providing capital to a website, albeit a successful one, that might bring with it further unwelcome attention? Whatever the reason, First Round will be watching for developments with interest.