FEATURE: Kabal – A Success Story of Growth and Transition

The Norwegian tech company Kabal (formerly known as Wellit), offers the world’s leading software solution for energy industry logistics. In May 2023, Kabal was sold from Norvestor to Insight Partners, and was one of the most notable exits in the Nordic Private equity market last year.

The Founders of Kabal: Jan Inge Pedersen and Fredrik Larsen founded Kabal in 2011.

The Kabal software has revolutionized logistics in the offshore energy sector. Having been under the stewardship of Norvestor from 2019 to 2023, Kabal illustrates the impressive growth that is possible when industry players team up with private equity investors.

Founded in 2011 by Jan Inge Pedersen and Fredrik Larsen, their original aim was to digitize logistics on the Norwegian continental shelf. The founders did this by developing the WELS software platform which facilitates real-time information sharing between all the stakeholders within the logistics space. By 2023, the software was being used by 6,700 companies worldwide, including most energy supermajors and more than 50 000 individual users.

In 2019, Norvestor acquired 60 percent of Kabal’s shares, providing it with financial backing and technological know-how to enable growth in Asia, US, and the UK. Tor Erling Gunnerud, Partner at Norvestor explains why they found the investment attractive back then:

– a possible “winner takes all” situation

– At the time of our investment, Kabal was a regionally dominant player, but on the verge of going global. We saw an opportunity to establish the global leading player if we could move fast. The vast number of oil companies and service companies using the solution for a common benefit, made the Kabal software extremely sticky.

– Norvestor was an invaluable partner throughout our 4-year long partnership, providing unwavering support. By offering expertise, resources, and strategic insights, they contributed to us achieving remarkable year-on-year growth. All in all, Norvestor’s commitment has been central in shaping Kabal’s trajectory, says CEO and co-founder of Kabal, Jan Inge Pedersen.

– In addition, we saw that the benefits of having all oil companies on the same solution far outweighed any risks. The returns for the oil companies using the solution were around 30-100 times the costs and the environmental effects were the largest we had ever seen in a company. We therefore believed we had a possible “winner takes it all” situation for offshore logistics with Kabal, says the experienced partner, Tor Erling Gunnerød.

Nearly tripled Kabal’s growth

Under Norvestor’s stewardship, Kabal nearly tripled its growth from NOK 58 million in 2018 to NOK 171 million in 2022. By accelerating technological information sharing, Kabal contributes to reduce the environmental footprint of the energy and maritime industries. It is estimated that the utilization of Kabal software between 2019 and 2022 is attributable to CO2 emission reductions, totaling 12.9 million tons per year.

– Running a tech company in 2024 is all about creating continuous value optimization for owners and customers; and being a great workplace for our great employees. To secure company growth, we need to continuously develop product and people, and we need access to funding. In my view Private Equity offers both funding and growth expertise more efficiently than other business models, says Jan Inge Pedersen.

– Together with the management team we built a very focused and aggressive strategy of how to win the global supermajors, such as ExxonMobil, Chevron, BP and Shell. By winning the supermajors, Kabal would build a stronghold in all the major oil regions in the world by having the energy operators bring their suppliers onboard the solution in these regions. Kabal would then create a pull for all other oil companies in the region as suppliers prefer to use one solution for their logistics. This strategy turned out to be even more successful than we had hoped, and we reached our goals 1-2 years before planned, says Tor Erling Gunnerød. 

Continued innovation and growth

With the transition to New York-based equity investor Insight Partners, Kabal is ready for further expansion – a testament to the innovative spirit of the Norwegian tech sector. The sale of Kabal by Norvestor thus signifies not only the culmination of a successful partnership, but also the starting point for continued innovation and growth in the years ahead.

– Together with Raymond James we ran a very successful exit process. With the position Kabal had taken in the market, this was a highly attractive asset and we had more than 30 unsolicited inbound interests from both industrial and PE players. Together with management we found what we believed was the best owner for the next growth phase for Kabal in Insight Partners, Gunnerød concludes.

– Insight Partners boasts an impressive track record in scaling global software companies, making them an ideal match for us. Their expertise and financial strength, combined with Kabal’s distinctive product range and market position, positions us for continued global expansion—both organically and through strategic mergers and acquisitions, says Jan Inge Pedersen.