NewSpring backs more local growth companies

NewSpring, the Radnor-based venture capital group, plans to nearly double its office space at Radnor Financial Center this fall when it takes over the former Aon Corp. offices on the third floor to accommodate its expanded staff, which now numbers 46, nearly triple the headcount of ten years ago.

“We’re making sure the team supports not only the existing companies” — NewSpring has invested $1.1 billion (corrected) in more than 140 firms since 2000, returning $1 billion so far to clients — “but also the ones we want to invest in,” founder Mike DiPiano told me.

The firm has promoted partner Jon Schwartz to the new position of president and chief operating officer. He had been chief financial officer.

NewSpring this year invested closer to home: Five of 10 recent investments have been within an hour or two of the office: Lynn Electronics (cable maker, Ivyland); Workplace Dynamics (employee software, Exton, where NewSpring joins previous investor Rittenhouse Capital, iPipeline’s Tim Wallace, and Fairmount Partners’ Charles Robins); Sussex Wire (cold-formed electronics, Easton); Atlantic Metro Communications (private cloud computing, Parsippany); Nelson Worldwide (corporate office design, Philadelphia.)

By contrast, in 2016, only one of 16 investments (Advanced Call Center Technologies, Berwyn) was closer than New York. DiPiano called that “a lull” in local investing and predicted it would be over soon. Philadelphia is no Silicon Valley but it’s big enough to offer plenty of business for investors with the operating experience to sort sheep from goats.

As with prior NewSpring investments, the recent deals are a mix of physical manufacturing, software, and services, including companies seeking to expand after decades in changing industries.

DiPiano says it’s a labor-intensive approach. “We have to be out there meeting with the entrepreneurs, and bringing companies up to a larger scale, and that takes resources,” he said. “And we have a lot of companies coming in to meet here. We’ll have a lot more conference rooms now.”

Schwartz’s promotion to president is part of NewSpring’s effort to accommodate more limited-partner investors and do more deals and, as Schwartz says, “stand out in a competitive landscape.” The firm has also expanded its website.

NewSpring, which makes growth-equity, control-buyout, and mezzanine-level investments, has satellite offices in Chicago and Baltimore and additional local teams in New York, Boston, and Atlanta.