Private equity group KKR and Goldman Sachs have acquired a “significant” minority stake in OutSystems, a platform that allows individuals to write software using very little coding, in a deal valuing the company at more than $1bn.

Both KKR and Goldman have raised a combined $360m in an investment round to boost the expansion of the Lisbon and Boston-based business and help develop its research into software automation, said two people familiar with the deal.

An announcement is expected as early as Tuesday morning in Europe, these people added.

OutSystems is a growth-stage company which employs more than 700 people. It has the leading position in its field but it is still marginally lossmaking, according to people familiar with its finances. It operates in 54 countries and its customers include Prudential and Deloitte.

The potential for growth is huge, according to Paulo Rosado, chief executive at OutSystems. “We are growing at 70 per cent per year in subscription revenues. The next stage is consolidating that growth,” he said.

“We see very significant market potential in the low-code development space,” said Christian Resch, managing director at Goldman Sachs Private Capital Investing. “Most global enterprises are in a process of digitising their operations. They are trying to leverage software whenever possible to streamline operations, establish new distribution channels, improve the customer experience and create new products and services.”

According to a Forrester report, the size of the industry was estimated at $3.8bn last year and it is expected to grow to $15.2bn in 2021.

The deal represents the largest equity cheque issued by KKR through its growth fund, which was launched in 2016. It came days after KKR agreed to buy US enterprise software company BMC in a transaction valued at $8.3bn.

It is also a sizeable deal for Goldman, which typically invests on average $80m in European tech companies, a person familiar with the deal said.

“This is an important deal because of the size of the investment and because this is a next-generation software business,” said Lucian Schönefelder, a partner at KKR. “We are investing in a unicorn.”

KKR and Goldman Sachs have been actively investing in some of the largest names in technology. Through its growth fund, KKR has invested in a total of eight investments since its launch, including car-booking company Lyft in the US and cyber security company Darktrace in the UK.

Separately, Goldman is one of the largest investors in technology companies in Wall Street and it has invested in companies such as car-booking app Uber and music-streaming app Spotify. The bank’s private capital investing unit, which is taking a stake in OutSystems, was an investor in Mobileye, an Israeli autonomous driving software company, which was listed in 2014 on the NYSE and sold to Intel last year.

The deal came at a time when buyout groups have been actively transacting in growth-stage technology companies. Carlyle, the Washington-based private equity group, on Monday said it had agreed to acquire a majority stake in software company Livingstone Holdings. The deal was valued at £50m, people familiar with the transaction said.

Private equity groups have also been raising new funds to invest in the area. Permira, the London-based buyout fund, is looking to raise $2bn for its first growth opportunities fund.

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