From its busy trading floors just outside Philadelphia, Susquehanna International Group has grown since its 1987 founding into one of the dozen biggest U.S. firms that bet their own money — trillions a year, in Susquehanna's case — on stocks, options, futures, and anything else that changes hands in securities markets.

Susquehanna's success has enriched its 3,000 world employees and made founder Jeff Yass the richest man in Pennsylvania, allowing him to fund gifts that have raised his profile, including grants to private and charter schools and donations to politicians who support those causes, and the pro-Republican Club for Growth.

Susquehanna's trading prowess and Yass' public influence have fascinated students of trading, politics, and philanthropy. Less well-known is how Susquehanna has pumped billions from profits into more than 500 emerging companies all over the world through its three in-house investment funds.

These investments follow a different timetable from the well-known private-equity and venture capital funds that have built U.S. tech giants and restructured industries. National private-investment firms such as Sequoia, Apollo Global, Carlyle, or KKR, and big Philadelphia-based firms including LLR and NewSpring Capital, invest for pension funds, corporations, and other rich clients, and expect results within fixed cycles, typically three to seven years. That's how long a company backed by private equity typically has to boost profits, cut costs, find a buyer, sell to public investors in an initial public offering (IPO) — or risk being sold at a loss, or shut down.

But a cash machine like Susquehanna, investing its own large trading profits, doesn't have to work on such a close timeline. Susquehanna says its private funds don't need speedy returns, as long as they show promise of future growth, even if it takes decades.

Susquehanna's private funds, which have collectively invested more than $10 billion since the early 2000s, include:

—Susquehanna Growth Equity, which has invested in 100 companies, mostly in the United States, some in Europe and Israel.

—SIG China, which has bought into more than 350 China-based companies, among them a late-1990s start-up that grew into social-media-video giant TikTok's owner, ByteDance, which accounts for the biggest chunk of Yass' roughly $50 billion personal fortune, as estimated by Bloomberg.

—Susquehanna Asia Venture Capital, which backs more than 60 businesses in India, Southeast Asia, and Pacific nations.

"It is the most patient capital you will find. It is permanent capital, with no time horizons," says Amir Goldman, a Wharton School ('94) economics graduate and Harvard MBA who has headed Susquehanna Growth Equity Partners (SGE) since its founding in 2005.

For its first 10 years, SGE focused on software, information and data services — "high-growth, high-margin stuff that you can't kick or touch," Goldman says.

Over the past decade, as tech founders offering strong returns on capital became harder to find, "we started investing in real businesses" with physical workplaces and products or services that "Mom would understand and like."

Soccer Shots: From Pennsylvania to 750,000 students around the world

Justin Bredeman moved to Pennsylvania in 1992 to play soccer for Messiah College. His teammates, Jeremy Sorzano and Jason Webb, went on to the semipro Charlotte, North Carolina, Eagles, boosting their modest checks with side gigs running a soccer program for children in a daycare. They recruited coaches, added sites, and called it Soccer Shots.

Bredeman married a classmate and went to work for Lancaster, Pennsylvania-based pretzel store chain Auntie Anne's, learning business under founder Anne Beiler and franchise chief Mike McCoy. In 2006 he bought a Soccer Shots franchise from his old classmates. In 2009, he joined them as a partner.

Over the next 10 years, they spread Soccer Shots to thousands of sites — its website lists programs at more than 50 Philadelphia city recreation centers and schools, with hundreds more in suburban counties — and started looking for investors.

"I met a lot of other franchisors," Bredeman recalled. "One of my buddies, Omar Soliman, a partner in College HUNKS Hauling Junk, told me Susquehanna had invested" in that Florida-based moving company. "He said they had been very collaborative."

So the Soccer Shots partners started meeting with private-equity investors.

"Susquehanna does not have a definite sunset date to close the portfolio" because it doesn't have to please outside investors on a fixed timetable, he said. "Jason, Jeremy, and I liked that." They were seeking help building a business, not speeding up a wealthy exit.

They signed with SGE at the end of 2021. With the new funding, they bought U.K.-based Little Kickers, which had spread to Europe, and set up a holding company, Strong Youth Brands, based in Middletown, Pennsylvania, a short drive from their old college.

The company now boasts 750,000 young soccer students in 46 U.S. states and 25 countries.

With its database of young soccer players and families and its network of franchisees and youth coaches, Bredeman says Strong Youth Brands isn't just in a lead position in the youth soccer business: "We're confident we'll identify other programs that appeal to kids and families."

In May, Strong Youth Brands signed a deal with Comcast's NBC Sports Next SportsEngine service, which offers cloud-based youth-sports registration, billing, customer service and apps.

Quality Collision: When your car picks a repair shop

Jerod Guerin trained in the Army as a medic at Fort Hood, Texas, and as a civilian he worked at a tow-truck service in Dallas that grew into a national franchise, Service King. In 2018, its owners merged it into Crash Champions, one of a string of private equity-backed car repair chains buying out mom-and-pop shops in hopes of creating national collision companies big enough to negotiate favorable rates from insurance companies.

Guerin developed a rival vision: He would get his shops certified directly by automakers, so when the new generation of digitally connected BMWs or Nissans crashed, their onboard computers and carmaker apps would point clients to his collision shops.

In 2020, Guerin sought investors, and "Susquehanna stood out in a lot of ways," he said.

Guerin was surprised to see that some founders who had worked at a Susquehanna-backed company would stay on to run another company after theirs was sold.

"A lot of guys have experiences with private-equity owners that they can't wait to be over," he said.

Guerin's company, Quality Collision, now operates 63 shops in nine states, including six Brandywine Coach Works locations in the Philadelphia area. Guerin says they are outperforming larger, private-equity backed rivals — and he feels well-supported to keep growing.

The Susquehanna investment professionals Quality Collision works with, headed by Kyle Squillario, "are there when you need them," Guerin said. "They are not lingering and micromanaging when you don't. They were willing to take a gamble that I could do what I said — and they are privately funded, which means their time horizons are significantly more flexible."

iCIMS: Fueling a hiring-software maker's growth

Colin Day set up an applicant-tracking software company, iCIMS, as a spin-off from telecom staffing firm Comrise Technology in 1999. The Holmdel, New Jersey, start-up "survived the 'near-death' dot.com implosion," built a customer list, and by 2010 felt ready to expand — so it hired a banker to find an investor.

"We had not heard of Susquehanna," Day said. He liked that the firm used its own money, so "they didn't have to spend half their time raising funding rounds, finding limited partners, and putting everything on unnatural five-year cycles."

SGE paid $35 million for its initial, minority stake in iCIMS in late 2011. Goldman, as SGE's leader, joined iCIMS's board — and persuaded big-name telecom veterans to join, too, including Eric Dunn, a senior official at tax-software pioneer Intuit, and Dan Springer, who was CEO at online signature-verification developer Docusign.

Day pushed his plan to grow by adding more services but was alarmed to find "our clients weren't asking for this." That forced him to admit to Susquehanna: "We need to shred our investment thesis."

He thought he'd get fired. But SGE and the new directors backed his new plan to focus on improving iCIMS's hiring software — and persuaded him to boost prices as a show of confidence in the product. By 2014, sales had quintupled to $100 million. SGE agreed to invest more, as part of a $57 million capital-raising, so iCIMS could target bigger customers. Over the next three years, sales doubled again, to $200 million.

In 2018, Vista Partners, a Texas-based, $100 billion private-equity firm, bought a controlling share of iCIMS, in a deal that valued that company at $1.2 billion, many times what SGE had invested; it was later joined by Boston-based TA Associates. Susquehanna kept a minority stake, and Day moved on. He's now part of Goldman's staff at Susquehanna, hunting for new companies to buy.

Susquehanna's strategy

SGE, with a staff of around 40, has invested more than $4 billion — an average of more than $40 million per company, but recently as much as $200 million each.

The fund has sold around one-third of the companies it backs, holding others for most of its 19-year history. At least two have rewarded early investors through stock-market IPOs, both in 2021: Payoneer, an American-Israeli cross-border payments system whose backers also include Betsy Zubrow Cohen, matriarch of a Philadelphia-founded empire of finance, energy and real estate companies; and Outbrain, a New York digital-advertising sales giant. Both Payoneer and Outbrain are still public, but they trade at prices below their IPO sale values. Susquehanna still holds some shares in each.

Recent investments range from Muck Rack, which helps public-relations firms and their corporate clients identify journalists and publications for likely coverage, to Qualtrics, an automated customer-service software company, formerly public and formerly owned by SAP, whose other investors include Los Angeles giant Silver Lake Partners and the Canadian national pension system.

Large or small, Goldman says, "we are searching for bootstrapped entrepreneurs," who have built promising companies without the help of traditional venture capitalists, and are ready to keep running them "with no fixed time horizons."

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