Stanley Capital Partners (SCP) will leverage the generative AI boom to reach €200 million to €300 million of revenue with hyper-automation services company Roboyo, founding partners James Brooks and Simon Cottle told PE Hub Europe.
London-based SCP made a strategic investment in Roboyo in early October. Roboyo works with large corporations to implement and manage AI-powered automation technologies. It is headquartered in Nuremberg.
Generative AI is one of the highest growth segments within hyper-automation, said Cottle. “If the whole hyper automation market is growing at about 22 percent, this is a higher growth sub-segment within that.”
M&A plans will involve gaining US exposure and access to different technologies, not just generative AI, but also low code/no code development platforms, which allow users to program software with little coding knowledge.
“There’s a market opportunity here to create an innovation partner for global corporates that has C-level relationships and can be the trusted, go-to company to implement all forms of AI and automation in the future with a high value impact,” said Brooks. “That is an open space in the market we want to build.”
SCP has set itself a goal with Roboyo: achieve €200 million to €300 million of revenue in roughly three years and to be a sustainably higher margin and cash generative business. If the firm achieves the goal, Brooks expects Roboyo to be attractive to strategic buyers and private equity. “At that point we will have effectively produced an unreplicable entity in this market,” he added. “If a little bigger than that, public markets might be an opening.”
Digitally deep
Founded in 2019, SCP is focused on healthcare and resource efficiency. It has a 120-person digital team, called SCP Digital, which Cottle describes as “effectively a strategic version of Roboyo”.
It is no stranger to generative AI, as it uses the technology for origination and value creation. “We used our large language model to map out the hyper automation landscape before we even looked at Roboyo,” said Cottle. “The other thing our language model is doing is working out the differences between clusters of businesses within the same sub-sector. You can therefore work out why one set of businesses are worth more than another.”
Brooks and Cottle see SCP Digital as a key differentiating factor. “There are a bunch of great firms out there, the likes of Archimed, GHO, Ambienta and Summa Equity,” said Cottle. “All fantastic, but not as digitally deep as we are.”
Roboyo is SCP’s first resource efficiency investment, a segment in which the firm sees ample opportunities for automation and AI, particularly within sustainability efforts. By 2050, about 10 gigatons of carbon could be removed from the market because of AI and automation, said Brooks. “That’s about 10-15 percent of the world’s emissions.”
SCP estimates AI and automation can remove more carbon than all the solar power in the developed world. “It has a far bigger baselining impact than almost any other form of initiative,” Brooks added. “And it has an incredibly high return on capital and has positive GDP contribution to growth for the overall economy.”
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