Confidential. For the use of qualified institutional limited partners only. Prepared December 2025.
Mercato Partners · Growth Fund V · 2026
Building better.
We back the next great American companies, built outside the coastal capital centers, in sectors that compound on organic revenue growth and customer lifetime value.
Four funds. Nineteen years. Fund IV: 26.7% Net IRR. The Cambridge vintage index: 5.5%.Discipline, in a number.
26.7%
Fund IV Net IRR 12/31/2025
1.86×
Fund IV Net TVPI 2.08× Gross
$946M
Fund IV Portfolio FY 2025 Revenue
57%
Fund IV Avg Revenue Growth · FY 2025 (Wt.)
Source: Fund IV 2025 Annual Report (12/31/2025 audited). Portfolio revenue and weighted average growth aggregated from underlying company financials. Past performance is not indicative of future results.
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The Mercato Promise
Investing in
better outcomes.
We invest where capital and expertise can catalyze efficient growth: companies with proven product-market fit, building durable partnerships with the manufacturers, hospitals, utilities, retailers, and financial institutions that operate across the entire country. These founders are building substantial businesses on less capital than their coastal peers, in regions where our local relationships still earn Mercato the unique right to invest.
The Mercato strategy is the foundation of how we deliver portfolio and fund returns. Three simultaneous goals for every investor: consistently strong base-case outcomes, opportunity for long-tail upside, and reduced capital loss rates.
Meet the partnership.
An introduction to Mercato Fund V from the partnership, Ryan, Josh, Dave, Ben, and Greg, on the strategy, the portfolio, and the deployment window we’re raising into.
In production at the firm’s headquarters in Cottonwood Heights, Utah. Coming soon.
Featured
The Partnership
Ryan, Josh, Dave, Ben, Greg
Status
Coming soon
Spring 2026
Fund V · Partner Introduction · Coming Soon
“Why we’re raising Fund V now.”
The full video and additional partner conversations will be available in the Fund V data room. Request access →
Mercato Partners · Growth Fund V
Discipline is the input. Returns are the output.
Mercato, by the numbers.
A growth-equity firm built on disciplined fund progression, non-coastal sourcing, and value-add infrastructure for companies that compound on organic revenue growth. Four funds. Nineteen years. One thesis.
Headquartered in Cottonwood Heights, Utah. Embedded presence across the Mountain West, Midwest, Southern California, the Southeast, and the Pacific Northwest.
19 yrs
Of growth-equity practice Founded 2007
4
Funds raised · Funds I–IV Fund V raising 2026
39+
Growth-stage investments completed
3.7×
Fund I Net DPI Fully distributed · 2008 vintage
1.86×
Fund IV Net TVPI 2.08× Gross
60%+
Avg portfolio company revenue growth at entry
Returns through three corrections.
Four funds. Nineteen years. Three corrections: 2008, 2020, and 2022–23. Across each cycle, the same discipline at entry, the same conviction in the hold, the same patience in the harvest. Fund I distributed at 3.7×. Fund II is harvesting. Fund III is recycling. The current fund is on pace to be the strongest of the active funds.
Fund
Vintage
Size
Cos.
Net IRR
Net TVPI
S&P PME
Growth Fund I
2008
$53M
7
51.0%
3.7×
7.7%
Growth Fund II
2012
$122M
10
10.2%
1.89×
11.3%
Growth Fund III
2016
$246M
13
7.8%
1.68×
13.2%
Growth Fund IV
2021
$400M
10
26.7%
1.86×
14.5%
Funds I–III Pooled
2008–2016
$421M
30
22.0%
2.16×
n/a
Net IRR and Net TVPI figures shown after management fees, expenses, and accrued carried interest. PME = Public Market Equivalent. All fund figures as of 12/31/2025 per 2025 audited Annual Reports. Pooled figures reflect Funds I–III combined; Fund IV is excluded as too early to pool meaningfully. See PPM Section VI for definitive fund-level performance. Past performance is not indicative of future results.
Fund IV Net IRR Trajectory
Fund IV Net IRR moved from 22.2% on 12/31/2024 to 26.7% on 12/31/2025, nearly five points of expansion across twelve months, attributable to revenue growth in three large positions and disciplined exit pacing.
The proof in three places.
The discipline shows up in three places: vintage-by-vintage returns, capital preserved across cycles, and quality of exits at harvest. Each Mercato fund’s net IRR plotted against its Cambridge vintage benchmark, alongside nineteen years of capital-loss and harvest-quality data, places Mercato amongst the few growth-equity managers that have returned capital through all three corrections, not just marked it up in between.
The firm’s first institutional fund delivered 51% net IRR through its final distribution in December 2020. The current fund is at 26.7% as of 12/31/2025, +21.2 pp above its vintage benchmark. Funds II and III sit below their vintages.
Four funds · Net IRR vs. Cambridge US Growth Equity Index by vintage
Fund I · 2008 vintage · Distributed 3.7× · final distribution Dec 2020
Mercato Fund I
51.0%
51.0%
Fund II · 2012 vintage · Harvesting
Mercato Fund II
10.2%
10.2%
Cambridge US GE Index
11.8%
11.8%
Fund III · 2016 vintage · Recycling
Mercato Fund III
7.8%
7.8%
Cambridge US GE Index
15.5%
15.5%
Fund IV · 2021 vintage · Deploying · 26.7% net IRR
Mercato Fund IV
26.7%
26.7%
Cambridge US GE Index
5.5%
5.5%
Mercato fund net IRRs as of 12/31/2025 per Q4 2025 audited Annual Reports. Fund I issued its final distribution in December 2020 and was formally dissolved in 2020; final audited figures per its 2020 Annual Report: 51% net IRR, 3.66× DPI/TVPI (shown rounded to 3.7×). Cambridge US Growth Equity Index per the respective vintage benchmark book (Cambridge Associates). Bar widths scaled to 60% maximum.
Capital Loss Rate · 19 Years
12.8%
Mercato · 5 of 39
13.7%
US Growth Equity
32.7%
US Venture
Vintage Benchmark Spread
+21.2pp
Fund IV vs. Cambridge US Growth Equity Index for the 2021 vintage. Spread net of fees.
Realized Discipline
30.0%
of Mercato investments harvested via IPO or $1B+ trade sale: 4× the peer average.
Capital-loss benchmarks per Cambridge Associates, Growth Equity: Turns Out, It’s All About the Growth (January 2019); capital loss ratios as of June 30, 2018, defined as capital in deals realized below cost, net of recovered proceeds, over total invested capital. Mercato loss rate per 2025 audited Annual Reports; measurement dates differ. Harvest quality: 9 of 30 Funds I–III investments (30.0%) were harvested via IPO or trade sale above $1B enterprise value; growth-equity peer rate of 7.4% per PitchBook ($250M–$1.5B fund cohort, data as of 12/31/2021).
Concentrated. Capital-efficient. Founder-led.
Five structural attributes of Fund IV: concentrated by design, weighted to defensible software and AI, profitable in aggregate, founder-led, and governed from the board.
Defensible Software & AI Exposure
90%
of Fund IV NAV in defensible software, infrastructure, and applied AI. Exposure to the productivity shift defining this decade. Source: Fund IV 2025 Annual Report (12/31/2025).
Already Profitable
38%
of growth portfolio companies are at or above breakeven. Capital efficiency built in, not retrofitted.
Founder as CEO
78%
of Fund IV companies remain founder-led. Alignment, conviction, and continuity in the seat.
Mercato Board Seat
100%
of growth investments have an active Mercato board seat. High-contact governance is the default.
Avg Revenue Growth
57%
weighted average revenue growth in 2025. Forecast 60–80% in 2026 based on contracted backlog.
The top five Fund IV positions, Lambda, Attain, Torus, Paytient, and Ownwell, account for approximately 87% of NAV. Concentration by design: conviction is how the long-tail outcomes behind top-quartile results get built.
Five Fund IV cases. Five underwriting tests.
Five Fund IV positions, each a deliberate test of a distinct underwriting thesis. Click any card for the full case study: underwriting at entry, milestone timeline, current performance, and marquee partners.
AI Infrastructure · Series B led October 2022
Lambda.
AI cloud infrastructure for mission-critical training and inference. The picks-and-shovels thesis, underwritten at $180M post on $65M of hardware revenue in 2022. Revenue compounded to $596M in FY 2025, anchored by a $5.5B Microsoft contract. Largest contributor to Fund IV NAV.
7.56×
Gross MOIC
$596M
FY25 Revenue
$5.5B
Microsoft Contract
Open full case study →
Defensible Software · Series led August 2021
Attain.
First-party data infrastructure for advertising measurement and activation. Post-cookie thesis underwritten at $190M post on $7.6M revenue. Compounded 10× on $36M of primary capital.
3.91×
Gross MOIC
$171.6M
FY25 Revenue
154%
Net Revenue Retention
Open full case study →
Applied AI · Series B led April 2025
Ownwell.
Vertical SaaS for America’s property-tax overpayment problem. Mercato led the Series B growth round with a capital-efficiency mandate: the company compounded +194% in revenue to $57.8M in 2025 and swung to positive operating cash flow in the same year.
1.90×
Gross MOIC
$58M
FY25 Revenue
+$5M
FY25 Operating Cash Flow
Open full case study →
Physical AI · Series C 2025
Artisight.
Computer-vision edge compute deployed across hospital networks. Contracted ARR grew from $9M to $32M in 2025 with reportable clinical ROI driving conversion (70% reduction in patient falls; $7M operational savings per major customer).
$32M
Contracted ARR
255%
FY25 ARR Growth
70%
Patient Fall Reduction
Open full case study →
AI Infrastructure · Series B led January 2025
Torus.
AI-based virtual power plant and behind-the-meter electricity storage. Mercato underwrote the thesis that power becomes the binding AI constraint. Marked from $450M to $1.3B in eight months on the Magnetar-led investment round.
4.77×
Gross MOIC
290%
FY25 Rev Growth
500MW
PacifiCorp Storage
Open full case study →
Source: Fund IV 2025 Annual Report (12/31/2025). Selected for illustrative purposes; see PPM Section VI for fund-level performance and complete portfolio. Fund IV fund-level TVPI as of 12/31/2025: 2.08× gross / 1.86× net (DPI 0.00×), per the audited 2025 Annual Report.
III · Why Now
Investing in
better entries.
Entry multiples have normalized to 5–12× ARR. Founder preference has shifted decisively from highest-valuation to trusted operational partner. AI productivity is real but unevenly capitalized. Vintages deployed into resets have historically produced some of private equity’s best returns.
“The market is not broadly reopening, it is selectively backing the companies clearly emerging as category leaders, and strategic buyers are providing liquidity through full-company acquisitions.”
Reset-vintage performance per Cambridge Associates, US Private Equity Looking Back, Looking Forward (November 2022): funds with first cash flows in 2001–03 and 2009–11 distributed at least 2× net DPI.
A market reset, fully expressed.
The conditions Fund V is deploying into are not a softer version of 2021. They are structurally different on five dimensions Mercato’s strategy is built for.
Characteristic
2021 Environment
2026 / Fund V Environment
Founder Preference
Highest valuation wins
Trusted, operational partner wins
Capital Distribution
Concentrated coastal · everywhere abundant
Re-concentrated coastal · middle of country starved
The discipline was constant. The market moved. The firm’s evolution has been one of precision, not philosophy: the same minority alignment, capital efficiency, and governance rigor, established well before the rate reset. The current fund carried that standard through the 2021 valuation expansion and returned 26.7% net. In 2026 those are the market’s standards, and post-correction vintages are where disciplined entry has historically compounded hardest.
2025 US IPO Activity
216 deals · $47.4B
Up from 176 deals / $33B in 2024. Well above the $8.6B trough of 2022.
Q3 2025 US VC
$80.9B · 4,208 deals
More money, no more deals. Capital concentrated, selectively deployed.
Harvest Backlog
57,674 companies
US VC-backed company inventory at a record high. Selective windows for category leaders.
The money came back, but it came back selectively, concentrated, and patient, rewarding the category leaders and no one else.
Three catalysts are in motion: a Fund IV IPO in preparation, a structured trade harvest under way, and contracted revenue ramping across the portfolio. Fund V is timed to invest into the deployment window these catalysts open, not after it.
Two-thirds of the economy. A fraction of the capital.
Is the mid-country opportunity big enough?
It is. The market is not too small. It is under-capitalized.
$20T
Regional GDP
Mountain West, Midwest, Texas, Southeast, SoCal, and the Pacific Northwest, the “Blue Ocean.”
81%
US Population
Lives outside CA, NY, MA
4,694
Late-Stage Cos.
Growth-stage companies in the Blue Ocean
1/5th
The Capital
Raised per company vs. coastal metros, for comparable scale
Every Mercato portfolio company · 45 companies across 4 funds and the Fund IV AI sleeve · 19 years
Fund I
7 cos · 2008 vintage
Fund II
10 cos · 2012 vintage
Fund III
13 cos · 2016 vintage
Fund IV
15 cos · 2021 vintage · incl. AI sleeve
Fund V Warehouse
2 named · 2026 vintage
Every Mercato growth-equity investment since 2007 plotted by HQ at the time of underwriting. Stance and Cradlepoint were underwritten in Fund I and again in Fund III and plot once. Fund II includes one inherited public position (SoFi, received in the Galileo sale) that was not separately underwritten and is not plotted. Hover any dot for company, fund, and city.
Mercato is built where the alpha is, not the auction.
Regional Breakdown · 45 companies across 4 funds and the Fund IV AI sleeve · 19 years
Region
Cos.
Sector Focus
Capital Environment
Mountain West
26
Home base · the deepest cluster · vertical SaaS, infrastructure, healthtech
Blue Ocean · Mercato HQ
Midwest
7
Vertical AI + healthcare · Chicago, Columbus, St. Louis, Columbia MO
Blue Ocean
Southern California
7
Vertical AI + consumer fintech · LA, Santa Monica, El Segundo, Irvine, San Clemente
Blue Ocean
Texas Triangle
2
Operator-led growth · Austin
Blue Ocean
Southeast
,
Emerging · capital scarcity · Fund V targeted exposure
Blue Ocean
Bay Area
2
Coastal exposure · Lambda · Primary Data
Red Ocean · $56B dry powder
New York
1
Coastal exposure · Latent AI
Red Ocean · $13B dry powder
41 of 44 underwritten positions (93%) headquartered in Blue Ocean regions. Lambda and Primary Data are the only Bay Area exposures; Latent AI the only Northeast. The inherited SoFi position (Galileo sale consideration) is excluded as not underwritten.
The market is big
$20T of US GDP. 81% of the population. 4,694 late-stage companies.
The Blue Ocean covers the largest share of US economic activity that exists. The question is not whether it is big enough. It is why 70% of growth capital still concentrates outside it.
The next great American companies have compounded in non-coastal corridors for two decades. IPO graduation runs at parity with SF, NYC, and Boston (1.1%). The companies clear the bar; fewer firms are chasing them.
The sourcing compounds
19 years in the same corridors. Founders pick up the phone.
This is a sourcing network capital cannot replicate. Mercato is first in the room on most positions, not highest in the auction. Pricing is rational, terms are clean, and the seat is earned by relationships built across cycles, not transactions.
Blue Ocean · Red Ocean · capital concentration side by side
Metric
Blue Ocean
Red Ocean (SF / NYC / Boston)
Variance
Late-stage dry powder
$8.4B
$69B
88% less
Late-stage companies
4,694
7,348
36% fewer
Dry powder per company
$1.8M
$9.3M
80% less
IPO graduation rate
1.1%
1.1%
Parity
Same companies graduating to IPO. Five times less capital chasing them.
IV · The Fund V Thesis
We invest where growth is
real, durable,
and not yet fully priced in.
Revenue is recurring, unit economics are positive, and ROI is measurable. Founders are in the seat. Mercato backs companies that have built for growth, in regions where rational pricing still earns the right to invest, and on terms that leave room for investors and founders to achieve outsized outcomes.
Four sectors. One operating stack.
Fund V invests across four sectors Mercato has built deep expertise in over the past nineteen years. Each is software-led, capital-efficient at scale, and structurally suited to the underwriting discipline Mercato applies to every investment.
25–30%
Defensible Software
Workflow systems an enterprise cannot live without once installed. Mission-critical adoption, durable gross margins, switching costs that compound through every renewal.
Representative holdings: Attain, Vasion
25–30%
Healthcare Technology
Clinical workflow, payor and provider systems, life-sciences software. Markets where measurable economic return drives procurement, and outcome-based pricing is finally taking hold.
Representative Fund IV holdings: Artisight, Paytient, Wellth, Cylinder
20–25%
Applied AI
AI embedded in proven vertical workflows, not foundation-model bets. Automation of an existing line item, with proprietary data and outcome-aligned pricing.
Representative Fund IV holdings: Ownwell, Protopia, Latent
25–30%
Digital Infrastructure
The picks-and-shovels of the AI buildout. Compute, networking, energy systems, data backbones. Capital-efficient at scale, customer concentration manageable.
Representative Fund IV holdings: Lambda, Torus
Construction
12–20 growth-stage companies. Concentrated by design.
Initial Check
$10–40M. 7–18% ownership. Single-name cap ~15%.
Underwriting
Re-underwriting on revenue and growth for every position, every quarter.
Geographic Bias
100% of Fund IV outside SF, NYC & Boston; same emphasis for Fund V.
Operating Intelligence · coastal-grade value-add, delivered where the founders build
The full growth-equity stack delivered on day one in Salt Lake City, Chicago, or Austin.
A growth-stage company in SF or NYC inherits a value-add stack by default: dedicated CXOs on retainer, a curated operator bench, pre-vetted bankers and recruiters, and capital-markets advice from the day the check clears. A comparable company outside those metros has historically had to rebuild that stack from scratch. Mercato closes the parity gap.
01
Coastal-grade capital markets & exit prep
Vasion scaled past $100M ARR with the same capital-markets and exit bench a Bay Area company gets by default, delivered to a company headquartered in St. George, Utah, not San Francisco.
02
Direct access to proven operators
Less a staffing bench than a network. We put founders in direct, ongoing contact with operators who have run the CFO, CRO, CPO, and CEO seats at scale, so they can see around corners and sharpen their own operating instinct. Attain’s CFO, the Cylinder CEO, the Kalderos CEO, and the operator who scaled Vasion past $100M ARR all came through it.
03
AI operating leverage
Benchmarks from 40+ portfolio AI deployments. Diagnostics, vendor shortlists, and board questions delivered in a one-hour call: the same applied-AI playbook a Series C in Mountain View would commission a consulting study for.
04
Strategic customer & partner access
Warm paths drawn from a curated relationship graph, not a LinkedIn search. Microsoft was introduced to Lambda through this network. This is how Torus met PacifiCorp. And how Artisight met Intermountain Health. Mercato provides the same kind of enterprise-logo access coastal capital has bundled into its checks for two decades.
05
Pre-vetted service providers + peer convenings
Bankers, lawyers, auditors, and recruiters evaluated against actual portfolio outcomes, not pitch decks. Portfolio CFO Council quarterly. Curated Growth Network of 300+ members. Inaugural AI Summit Fall 2026.
Source: Fund V Value-Add Strategy Memo · Josh Christensen · April 2026
Operators who built what we now fund.
Five Investment Committee members, aligned through parity carry. Partners are all former operators who have built and exited the kinds of companies we now invest in.
Ryan Sanders
Managing Director
NACD Outstanding Director (2025). Kauffman Fellow (2026). Prior experience: Co-founder of Calixus (acquired by MediaNews Group), Escalate Capital (mezzanine), Comcast. Notable boards: Galileo (acquired by SoFi), Stance (acquired by Marquee Brands), Atomic, Lambda, Lendio, ObservePoint. BS in Finance from Brigham Young University and MBA from University of Texas McCombs School of Business.
Operator at Backcountry.com from sub-$30M to past $350M in sales, the growth stage Mercato backs, across sales, engineering, and corporate development M&A. At Cicero Group, applied AI, machine learning, and pricing to revenue growth. Author of the Fund V Value-Add Strategy. Notable boards: Vasion, Protopia AI, Artisight. BA, MBA, and JD, University of Utah.
Former operator with seven prior exits to Oracle, Amazon, Maritz, Aurea, Experian. Scaled Oracle business unit from $80M to $350M. Author of Freemium (Stanford Business Books, 2025). Notable boards: Forrester (NASDAQ: FORR), Neuro-ID (acquired by Experian), Allegiance (acquired by Maritz), Fundly (acquired by NonProfitEasy). BA in German Literature from Brigham Young University and MBA from Harvard Business School.
Utah Business CXO of the Year (2019). Former President and CRO of Lendio (Mercato Fund III), scaling revenue from $8M to $125M. Over 20 years in the C-suite of PE- and growth equity–backed companies across franchising, edtech, services, and fintech. Prior experience: The Home Depot, Harris Research. Notable boards: Cylinder, Paytient. BA in Economics from Brigham Young University.
Co-founded Mercato Partners (2007) after founding vSpring Capital. Two-time CEO. NACD Outstanding Director (2018). Notable boards: Domo (NASDAQ: DOMO), Skullcandy (IPO; acquired by Mill Creek Capital), Fusion-io (acquired by SanDisk), Cradlepoint (acquired by Ericsson), Goal Zero (acquired by NRG Energy), MediConnect (acquired by Verisk Analytics). BS in Computer Science, MBA, and PhD in Entrepreneurship and Venture Finance, University of Utah.
Software, data & infrastructure with durable margins · AI-native
Geographic Bias
~85% US-domestic · non-coastal sourcing emphasis
Economics & Governance
Management Fee
2.0% of commitments during Investment Period; 2.0% of invested cost thereafter
Carried Interest
20% over 8% preferred return · European waterfall
GP Commitment
2% of aggregate commitments
Co-Investment
No-fee, reduced-carry · pro rata · LPAC oversight
Key Persons
Sanders, Christensen, Boyce, Davis
Governance Standard
ILPA Principles 3.0 · expanded LPAC
Stress Testing
Every position underwritten against multiple downside macro scenarios at IC
AGM 2026
October 1–2 · Laguna Beach, California
Summary terms shown. Full terms set forth in the Private Placement Memorandum and Limited Partnership Agreement. Past performance is not indicative of future results.
Continue the Conversation
Build where you live.
Fund V holds a first close in Q3 2026. We are inviting a select group of institutional limited partners into the data room now, ahead of the Annual General Meeting on October 1–2 in Laguna Beach. The room includes the PPM, fund-level performance detail, LPAC reference conversations, and the 2025 Annual Report.
Two ways to start: request the data room, or schedule a 30-minute introduction with the partnership.
Materials version v2026.07.02. This version supersedes all prior versions. Accessed on load.
This presentation is confidential and intended solely for the recipient. It must be maintained in strict confidence and may not be forwarded, reproduced, or otherwise distributed without the written consent of Mercato Partners.
Top quartile comparison is based on Net IRR as of YE 2025 as compared to Cambridge Associates benchmark as of Q3 2025. Investors should not place undue reliance on such comparisons given the difference in the performance dates.
Nothing in this presentation constitutes (i) an offer to sell or a solicitation of an offer to buy any security; (ii) an opinion or recommendation with respect to any investment by any particular investor; or (iii) investment, legal, tax, accounting, or other advice. Each investor will be required to review and execute definitive transaction documents to effect an investment in any investment vehicle sponsored by Mercato Partners (a “Fund”).
Information in this presentation does not purport to be complete. Certain information has been obtained from third parties, and Mercato Partners assumes no responsibility for its accuracy or completeness.
Prospective investors are invited to ask questions of, and engage in further discussions with, Mercato Partners before investing in a Fund. An investment in a Fund will involve significant risk and can result in the loss of entire principal.
Appendix A
Portfolio Case Studies
Five deep dives on representative Fund IV investments: Lambda, Attain, Ownwell, Artisight, and Torus, with deployment history, milestone timelines, leadership, and source citations.
Case Study · Fund IV · AI Infrastructure
Lambda.
AI cloud infrastructure for mission-critical training and inference. Mercato led the Series B in October 2022; the company now anchors the AI Infrastructure theme as the largest position in Fund IV by NAV.
7.56×
Gross MOIC 12/31/2025
$596M
FY25 GAAP Revenue
$5.5B
5-yr Microsoft contract signed
$1.5B
Series E led by TWG Global, 2025
The Mercato Thesis
Underwritten October 2022 · $25M at $180M post-money
AI-native infrastructure. A decade-long dedication to AI compute, when AI was a research category and not a procurement line item. The underwriting case: GPUs will become the binding constraint on enterprise AI deployment, and the operators with disciplined unit economics will compound.
We led the Series B at a rational entry multiple in a category that would shortly become priced for narrative. Lambda was already at $65M of hardware revenue and breakeven at entry, capital-efficient discipline, not a story round.
Revenue Trajectory, FY 2022 to FY 2026E
FY 2025 cloud run-rate at year-end: $831M. FY 2026E projects $854M cloud revenue (+67% YoY) within total revenue of $862M.
Milestone Timeline
Oct 2022 · Series B
Mercato leads at $180M post-money on $65M hardware revenue
$25M deployed. Mercato joins the board. The thesis: GPUs are the binding constraint on enterprise AI deployment; operators with disciplined unit economics will compound.
2023 · Cloud build-out
Annual revenue more than doubles to $236M as cloud capacity scales
First year of post-investment compounding. Enterprise demand validates the AI-native cloud thesis.
2024 · Hyperscaler-grade growth
Revenue accelerates 72% to $405M. Adjusted EBITDA materially positive.
Capital efficiency on display: profitable scaling in a category most peers cannot underwrite.
2025 · The Microsoft contract
$5.5B, five-year agreement to deploy 51,849 NVIDIA GPUs
Cloud run-rate reaches $831M at year-end. 22 data centers operational; 382 MW contracted (+219% YoY). $1.9B+ in Super Intelligence ACV (+1,154% YoY).
Q4 2025 · Series E
$1.5B round led by TWG Global at materially higher valuation
Mercato carry value reaches $264.5M on $35M total invested, 7.56× gross MOIC. Lambda recognized as the 2025 NVIDIA AI Excellence Partner.
2026E · Forward outlook
Management projects $862M revenue, including $854M cloud (+67% YoY)
Selectively exposed to public-market liquidity windows; structured secondaries underway through dedicated continuation vehicles where appropriate.
Marquee Customers & Partners
MicrosoftNVIDIAAmazonAnthropicCoreWeaveOpenAI
Mercato Value-Add Delivered
Capital Markets: Brokered relationships with strategic acquirers and capital-market counterparties through the run-up to Series E.
Anticipatory Governance: IPO-ready executive team and board chair assembled.
Strategic Customer Access: Warm introductions through Mercato’s curated AI Operating Network.
Multi-Path Exit Readiness: Audit-grade preparation underway from 2024; structured secondaries optioned where appropriate.
Source: Fund IV 2025 Annual Report, p. 14. NAV at 12/31/2025: $264.5M on $35M total invested. Selected as illustrative of Mercato’s AI Infrastructure thesis. Not indicative of fund-level performance. See PPM Section VI for full disclosures. Fund IV fund-level TVPI as of 12/31/2025: 2.08× gross / 1.86× net (DPI 0.00×), per the audited 2025 Annual Report.
Case Study · Fund IV · Defensible Software
Attain.
First-party data infrastructure for advertising measurement and activation. Mercato led the Series in August 2021. Revenue has compounded 10× on $36M of primary capital, while achieving 10.3% EBITDA margins.
3.91×
Gross MOIC 12/31/2025
$171.6M
FY25 Revenue
154%
Net Revenue Retention
$17.6M
FY25 Adj. EBITDA
The Mercato Thesis
Underwritten August 2021 · $15M at $190M post-money
First-party data infrastructure for measurement and activation in advertising. The underwriting case: post-cookie, brands and platforms will need consented, identity-grade data, and the firms that can deliver it efficiently to enterprise buyers will compound.
Multi-time, industry founders. EBITDA breakeven at entry on $7.6M of LTM revenue. Mercato led the Series at a price that respected both founder credibility and operating discipline. 10× revenue growth on $36M of primary capital in the four years since.
Revenue Trajectory, FY 2021 to FY 2025
Data business unit grew 125% to $32.1M; net revenue retention of 154%. Capital-efficient profitability achieved at 10.3% EBITDA margin.
The Trade Desk, Amazon, Meta, Google, OpenX, Kargo become anchor customers. Mercato adds follow-on capital.
2025 · Profitability at scale
Revenue $171.6M (+57% YoY) at $17.6M EBITDA (10.3% margin)
Data business unit grows 125% to $32.1M. NRR reaches 154%. 15M+ consumer app downloads. Nearly $1B advance volume processed; recoup rate improves to 96.7% through proprietary automation.
Forward outlook
Capital-efficient compounding sets up multi-path exit optionality
NAV reaches $105.7M on $27M total invested, 3.91× gross MOIC. Mercato continues active board engagement and exit-readiness preparation.
Marquee Customers
The Trade DeskAmazonMetaGoogleOpenXKargo
Source: Fund IV 2025 Annual Report, p. 11. Attain (formerly Klover Holdings). NAV at 12/31/2025: $105.7M on $27M total invested. Past performance is not indicative of future results. Fund IV fund-level TVPI as of 12/31/2025: 2.08× gross / 1.86× net (DPI 0.00×), per the audited 2025 Annual Report.
Case Study · Fund IV · AI Infrastructure
Torus.
AI-based virtual power plant and behind-the-meter electricity storage. Mercato underwrote the thesis that power becomes the binding AI constraint. Marked from $450M to $1.3B in eight months on the Magnetar-led round.
4.77×
Gross MOIC 12/31/2025
290%
FY25 Revenue Growth
$39.8M
FY25 Bookings
500MW
PacifiCorp Storage Commitment
The Mercato Thesis
Underwritten January 2025 · $22M at $450M pre-money
Power is the binding AI constraint. Global data-center electricity consumption is projected to more than double to ~945 TWh by 2030 (IEA, Energy and AI, April 2025). Q4 2025 transformer pipeline halved per Wood Mackenzie; data-center delays of 24–72 months. The storage layer captures economic rents anywhere generation outpaces grid capacity.
Torus combines behind-the-meter battery hardware with AI dispatch optimization and a virtual power plant software layer. Long-term utility contracts (PacifiCorp 20-year commitments including 500MW of storage) anchor the demand side; the 540,000 sq ft GigaOne manufacturing campus in Salt Lake City anchors the supply side.
Milestone Timeline
Jan 2025 · Series B
Mercato leads at $450M pre-money on $1M LTM revenue
$22M deployed. Energy & Grid theme position. Mercato joins the board. The thesis: power becomes the binding AI constraint of the decade.
Q2–Q3 2025 · Bookings traction
Bookings ramp to $39.8M as utility contracts close
PacifiCorp commits to 20-year contract durations including 500MW of behind-the-meter storage. GigaOne manufacturing site selected in Salt Lake City: 540,000 sq ft, designed to scale production beyond one gigawatt.
Sep 2025 · Markup round
$200M raise led by Magnetar at $1.3B valuation
2.3× markup on Mercato’s entry valuation within eight months. Consistent with the binding-constraint thesis and the asset-heavy, contract-anchored business model.
FY 2025 results
Revenue $3.9M (+290% YoY); bookings $39.8M
Management forecasts $80–$110M revenue for FY 2026 as PacifiCorp deployments ramp and additional utility partners close. NAV reaches $104.9M on $22M of Fund IV capital (preceded by a $3M AI-sleeve investment), 4.77× gross MOIC as of 12/31/2025.
2026E · Build-out
GigaOne production scales; utility contract pipeline expands
Targeting $80–$110M revenue. Mercato continues active board engagement, supporting the operational scaling, talent build, and capital-markets posture.
Marquee Partners
PacifiCorpMagnetar Capital (lead, Series C)Utility Pipeline (multiple, undisclosed)
Source: Fund IV 2025 Annual Report, p. 12. Torus Investment Memo, January 2025. NAV at 12/31/2025: $104.9M on $22M of Fund IV invested capital; an additional $3M was invested via the firm’s AI sleeve. Past performance is not indicative of future results. Fund IV fund-level TVPI as of 12/31/2025: 2.08× gross / 1.86× net (DPI 0.00×), per the audited 2025 Annual Report.
Case Study · Fund IV · Applied AI
Ownwell.
Vertical SaaS for the $57B annual property-tax overpayment problem. Mercato led the Series B growth round in April 2025; the company has compounded +194% in revenue to $57.8M and swung to positive operating cash flow in the same year.
1.90×
Gross MOIC 12/31/2025
$58M
FY25 Revenue
+194%
FY25 Revenue Growth
+$5M
FY25 Operating Cash Flow (from −$7M)
The Mercato Thesis
Underwritten April 2025 · $15M of $30M Series B growth round
The problem. Property-tax overpayment is one of the largest unaddressed consumer-software opportunities in the US, with appeals historically inaccessible to the typical homeowner. Ownwell’s underwriting thesis: software wins when it’s tied to large points of consumer spend with measurable savings as the value prop.
Founder-led, capital-efficient at entry, and already proven across major Texas property markets. Mercato led the Series B growth round with a deliberate capital-efficiency mandate built into the term sheet, the company swung from $7M of FY24 loss to $5M of positive operating cash flow in the year following.
Milestone Timeline
Apr 2025 · Series B Led
Mercato leads the growth round
$15M of $30M Series B deployed. Mercato joins the board. Capital-efficiency mandate built into the round structure: profitability path required.
2025 · Texas scale-up
750,000+ Texas properties appealed in 2025; 86% success rate
$774 average annual customer savings; appeal process becomes the operational backbone for national expansion.
YE 2025 · Cash flow inflection
$58M revenue (+194% YoY) at $5M positive operating cash flow
First full year of capital efficiency after Mercato’s entry. The mandate holds. NAV reaches $28.4M on $15M total invested.
2026E
Management targets $90M+ revenue with continued cash-flow positivity
National expansion underway; appeal volume crosses 1M cumulative; $400M+ saved for homeowners across the platform.
Distribution & Reach
Direct-to-Consumer35 U.S. States1M+ Lifetime Appeals$400M+ Cumulative Savings
Source: Fund IV 2025 Annual Report, p. 13. NAV at 12/31/2025: $28.4M on $15M total invested. Market-size figure ($57B annual overpayment) is an Ownwell company estimate. Past performance is not indicative of future results. Fund IV fund-level TVPI as of 12/31/2025: 2.08× gross / 1.86× net (DPI 0.00×), per the audited 2025 Annual Report.
Case Study · Fund IV · Physical AI
Artisight.
Computer-vision edge compute deployed across hospital networks. Mercato anchored the Series B; Contracted ARR has grown from $9M to $32M in 2025 with reportable clinical ROI driving conversion.
$32M
Contracted ARR at YE 2025
255%
FY25 Contracted ARR Growth
70%
Reduction in Patient Falls
$7M
Operational Savings per Major Customer
The Mercato Thesis
Computer vision becomes the AI substrate for hospital workflow
Edge compute, deployed in physical clinical settings. The underwriting case: computer vision and edge inference become the substrate for hospital workflow automation, replacing legacy nurse-call and rounding systems with always-on intelligent monitoring. Hospitals purchase based on demonstrated ROI; reference customers with quantified savings drive the conversion funnel for the rest of the market.
Multi-hospital pilot conversion was validated at entry. Mercato as core institutional investor with board seat from Series B onward. Outcome-pricing thesis embedded: hospital purchase decisions are anchored on measurable clinical and operational savings, not feature sets.
Milestone Timeline
Series B · Mercato Anchors
Mercato joins as core institutional investor
Underwriting thesis: edge compute + computer vision becomes the AI substrate for hospital workflow.
2024 · Pilot conversion
Contracted ARR reaches $9M; reference customers in major hospital networks
Pilot-to-deployment conversion model proves out; reportable ROI metrics emerge.
2025 · ROI inflection
Contracted ARR grows from $9M to $32M (+255% YoY)
70% reduction in annual patient falls reported across major customer deployments; $7M operational savings per major customer cited; conversion funnel scales beyond reference accounts.
Late 2025 · Series C
Series C round closes with hospital customers and NVIDIA participation
Strategic anchor investors validate the category; capital lined up for the next 24 months of deployment scaling.
2026E
Management targets $85–$100M Contracted ARR by year-end 2026
Healthcare AI infrastructure category leader; reference customers with reportable ROI drive procurement at peer hospital systems.
Source: Fund IV 2025 Annual Report, p. 10. Past performance is not indicative of future results. Fund IV fund-level TVPI as of 12/31/2025: 2.08× gross / 1.86× net (DPI 0.00×), per the audited 2025 Annual Report.
Mercato Fund V · Confidential
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