Luca Cartechini has raised more than $220M, bought 18 software companies, and is weeks away from closing 3 more. He would still rather you didn’t call him an investor.
“We’re not a fund. We don’t sell these companies. We hold them forever,” said the co-founder and CEO of Circeus, speaking to Tech Funding News for its TechTalks with TFN interview series.
It is a distinction that matters, because the machine behind it looks nothing like a traditional acquirer. Circeus reviews 20 to 25 software businesses every week, roughly 1,000 a year, and bids on just 1.5 to 2% of them.
The companies it does buy, typically bootstrapped vertical software firms with $2M to $10M in recurring revenue, are handed something they could never build on their own: a central AI engineering team whose job is to turn them into what Cartechini calls “much better versions of themselves.”
The results have compounded quickly
Founded at the end of 2021 as Shop Circle, an acquirer of e-commerce apps, the London-based group now employs around 300 people, serves more than 250,000 businesses worldwide, and, earlier this year, stepped out under a new holding-company brand, with Shop Circle continuing as its commerce division. The rebrand positions Circeus alongside Beacon Software in North America and Bending Spoons in Europe as part of a new generation of AI-native software consolidators.
Cartechini, a former Jefferies equity research analyst who later invested for a London family office, started the company with co-founder Gian Maria Gramondi, an Amazon alumnus, with no prior founding experience. “We started very small, small acquisitions, smaller amounts of capital, and really tried to prove the model one step at a time,” he said.
The model is deliberately narrow: acquire mission-critical vertical software, typically businesses with $2M to $10M in annual recurring revenue that have never raised capital, and make them meaningfully better. What has changed is where AI sits in that process.
Before Circeus even signs a letter of intent, its central team assesses a target’s workflows, data advantage, defensibility and technical readiness. Two questions now shape every deal, Cartechini explained: how defensible is this business in an AI world, and how much better could it become if operated natively with Circeus’ team.
“AI is becoming really a core part of the investment decision, rather than something we think about 6 months after closing,” Cartechini said. And with only up to 10 acquisitions a year against 1,000 reviewed, discipline is structural. “We see enough opportunities that there is no reason to force a deal,” he added.
Moving software from systems of record to systems of action
Post-acquisition, the thesis is not cost-cutting but product transformation, moving software from “systems of record to systems of action,” from tools that help humans complete tasks to tools that complete them.
Portfolio companies stay decentralised and keep building locally, while a central team of more than 10 forward-deployed AI engineers embeds into each business, working on agentic product features, support automation and internal assistants — capabilities a $5M ARR bootstrapped software company could never hire for on its own.
Anything solved once is reused everywhere. “Build locally, curate centrally and reuse across the group,” is how Cartechini summarised it, or internally, “build once and pull many times.” It is the same logic driving recent deals such as Dondy, the conversational commerce platform Circeus folded into Shop Circle in July.
That compounding machine is also why the company’s latest funding decision raised eyebrows. Circeus was profitable, well capitalised and not running a process when it brought the European Bank for Reconstruction and Development onto its cap table. Cartechini said the choice was about who sits around the table rather than capital.
“We’re trying to build something that compounds over decades rather than optimise around the next funding round,” he said, adding that the EBRD’s deep understanding of Central and Eastern Europe, where a significant part of Circeus’ organisation is based, made it strategically valuable well beyond the cheque.
Heading to Wall Street
An IPO, Cartechini acknowledged, “is definitely something that will make sense over time,” pointing to listed comparables such as Constellation Software and newly public Bending Spoons. Nasdaq appeals for its capital depth and software investor base, though he was careful not to write off London, where he knows the stock exchange team well.
“We’re not in a rush. The ambition is really to build one of the largest and most durable technology companies in Europe,” he added.
His advice to European founders runs counter to the current glamorisation of startup life. “Reality is that it’s a life choice. On average, you will be in your company for at least 10 years if you’re successful,” Cartechini concluded.
Find a problem you are almost obsessed with, he argued, or you will not have the energy to go the distance.
This article is produced in a content partnership with Circeus.
