capital D, the next-generation private equity fund manager investing in disruptive mid-market businesses across Europe, today announced it has acquired a majority stake in Phrasee (the “Company”). Investment Funds managed by Morgan Stanley Expansion Capital, together with a group formed by Keyhaven Capital Partners and family offices co-invested alongside capital D.

The capital D consortium have acquired a 64% stake in Phrasee with the founders and management holding the remainder.

Founded in 2015, London-based Phrasee is an AI-powered SaaS platform that revolutionizes customer communication through brand language optimization. Phrasee is disrupting the traditional role of the human copywriter/marketer using data science and a powerful proprietary natural language generation engine to generate, automate and optimize marketing language in real-time with superior performance.

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Phrasee’s platform optimizes e-mail, SMS, web and social media campaigns, by providing AI-generated optimized and brand safe language to clients, driving higher open and click-through rates, and sales. Phrasee’s clients are typically large, well-known enterprises across multiple business sectors in the United States of America and Europe.

As a result of the transaction, the consortium led by capital D will partner with Phrasee’s founders Parry Malm, Vic Peppiatt and Neil Yager to support the Company on the next phase of its impressive growth journey. The capital D consortium plan to support further development of Phrasee’s products across a wider range of customer-journey touchpoints and media channels, as well as to enhance its commercial organization both in direct enterprise sales and customer success, and through establishing software vendor partnerships. This investment will also support Phrasee’s further expansion in the United States, a market already responsible for more than 60% of the Company’s sales.

Daryl Cohen, Partner, capital D, said: “Phrasee has developed a compelling AI-powered language generation platform that is revolutionizing the way companies are engaging with their customers in real time. We are proud to become Phrasee’s partner and believe we can add material value in supporting its continued success.”

Pete Chung, Partner, Morgan Stanley Expansion Capital, said: “Phrasee represents a new generation of solutions combining both AI and business expertise to provide optimized solutions at exceptional scale. We’re thrilled to support Phrasee in its next stage of growth and look forward to working with the team to build Phrasee into a category leader.”

Sasha van de Water, Managing Partner at Keyhaven said: “We are excited to be partnering with capital D to invest in Phrasee. The platform has huge potential to disrupt the industry, and has a proven track record of successfully acquiring customers at pace. We look forward to supporting Phrasee with developing an even stronger customer proposition, transforming the way leading marketing teams operate for the better.”

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