Canadian private equity firm PartnerOne has acquired HeadSpin in a fire sale, according to TechCrunch. HeadSpin, a mobile app testing company, raised $117 million in funding since its inception in 2015. However, most of its former employees did not receive anything for their options. The company was last valued at $1.1 billion in 2020 and had an ARR of around $20 million. The acquisition price is estimated to be between $20 million and $40 million.
Former executives of HeadSpin did not benefit from the buyout, as their options were canceled due to being “underwater.” The CEO, COO, and CTO were all let go, while some long-term employees received no compensation. PartnerOne confirmed the acquisition but did not disclose the amount.
HeadSpin’s founder, Manish Lachwani, was sentenced to 18 months in prison for wire fraud and securities fraud. He inflated the company’s revenue and created fake invoices. PartnerOne claims that HeadSpin was a victim of its former CEO’s actions and that the management team worked to correct the situation.
Despite the challenges, HeadSpin is known for its app testing and monitoring services. PartnerOne believes that the company has a bright future and plans to invest significantly in it. The new management team is composed of leaders from another PartnerOne company, Evolving Systems.
Overall, the acquisition of HeadSpin by PartnerOne marks a new chapter for the company after the fraud committed by its founder. Despite the initial setbacks, PartnerOne is committed to supporting HeadSpin’s growth and providing industry-leading products to its customers.
