“I’ve been working the hardest I’ve ever worked in 30 years of being in private equity. It’s extremely exciting, but it’s changing very rapidly… I feel that our team, for 30 years since we started, has been training all of our lives over 600 software acquisitions for this opportunity that we have now, which is to buy the market leader, transform that market leader, and push it into the next generation of AI. That is way too exciting to slow down or think about doing anything else.”
— Orlando Bravo, Founder & Managing Partner, Thoma Bravo
Orlando Bravo is the founder and managing partner of Thoma Bravo, the largest private equity firm focused exclusively on software.
The firm has raised over $130 billion in capital and completed more than 600 software acquisitions, making it the most active and successful buyer of B2B software companies in history. Thoma Bravo’s portfolio includes iconic enterprise brands like Anaplan, Dynatrace, SailPoint, ForgeRock, and their recent $12 billion Dayforce acquisition — their largest deal ever. The firm exclusively invests in enterprise software and technology-enabled services companies, typically targeting businesses with $100 million to several billion in revenue. For B2B SaaS founders, Thoma Bravo represents the gold standard of software private equity — known for operational excellence, disciplined growth strategies, and the ability to transform good software companies into category leaders.
In a CNBC interview with Sara Eisen and Carl Quintanilla, the contrarian PE giant is going all-in on enterprise software during the AI boom. Here’s why they’re working harder than ever after 600+ acquisitions.
“You cannot value a $50 million ARR company at $10 billion,” he said bluntly. “That company is going to have to produce a billion dollars in free cash flow to double an investor’s money ultimately.”
Yet despite this warning, Thoma Bravo just closed $42 billion in acquisitions this year, including their largest deal ever — the $12 billion Dayforce acquisition.
The firm is working harder than at any point in their 30-year history. What gives?
As Bravo summarized on Twitter after the interview: “At ThomaBravo, we see AI not as a threat to software, but as a tailwind for the next stage of SaaS evolution — driven by strong fundamentals and disciplined growth.”
The Dot-Com Parallel Everyone’s Missing
The parallels to 2000 are real — but incomplete. Yes, valuations are insane. “Valuations in AI are at a bubble. Both public and private,” Bravo confirmed. But there’s a crucial difference from 25 years ago: “Now you have some really big companies and some big balance sheets and healthy balance sheets financing this activity.”
Thoma Bravo’s origins in the dot-com bust shaped everything about how they operate today. “That’s when we learned to buy a software company cheap, when we learned to cut costs, when we learned how to operate,” Bravo recalled. “I was young in San Francisco in those days and all the bars closed down and all the restaurants closed down all of a sudden.”
That scar tissue created the discipline that defines their approach now: profitability and growth have to go together. “We are not a subscriber to any money losing company,” he emphasized.
The Enterprise Software Thesis: Why AI Is Actually a Massive Tailwind
Here’s where it gets interesting. While AI startups are burning through billions at unsustainable valuations, established enterprise software companies are positioned for a renaissance.
The logic is straightforward: “You’re selling your customer an important solution, a workflow solution, a system of record, something that’s deeply embedded in that customer’s process. And now with AI, you have so much more to sell them.”
Agentic solutions. Easier customer engagement. Enhanced workflows. These aren’t theoretical benefits — they’re live in the market right now.
The death of SaaS was greatly exaggerated. Remember the panic a few months ago when software stocks cratered over fears that AI would disrupt traditional SaaS? “It’s becoming clearer and clearer that it’s a big, big tailwind for software,” Bravo said. “The software industry together with AI is going to provide a new growth curve to it.”
He’s seen this movie before. After the dot-com crash, “I had one of my partners show up in my office and say are we going to do any more software deals? I read this article that this is over.” That turned out to be spectacularly wrong.
The Contrarian Bets That Could Define the Next Decade
Thoma Bravo is making moves that look counterintuitive on the surface but brilliant if you understand their thesis.
Call centers. Everyone says they’re dead. AI will replace them. Thoma Bravo is consolidating the space. Why? “AI is so additive to it. Now, the companies that we’re putting together in that space, we believe, have next generation AI solutions and offer customers a full platform versus point solutions.”
It’s not about believing humans won’t be displaced. It’s about understanding that the best call center platforms will use AI to transform the experience — not eliminate it entirely.
Cybersecurity in the age of AI. Their public company SailPoint just introduced AI identity management — “a whole new market for the company that may be multiples of the size of human identities.” AI doesn’t kill cybersecurity. It creates massive new attack surfaces and opportunities.
The pattern: Find where AI creates new problems, or enhances existing solutions, not where it theoretically replaces everything overnight.
The Evolution vs. Revolution Reality Check
This might be the most important insight for founders: Technology adoption is evolutionary, not revolutionary.
“This massive human displacement that people talk about, that’s not going to happen,” Bravo said. “People and companies have processes, regulations, sensitive data, compliance — all kinds of things that enable them only to move slowly to adapt new ways of doing things.”
He shared a telling anecdote from Super Return in May: “Somebody said that by next year 70% of all jobs, white collar jobs, are going to be gone. Somebody at the conference said all of you here, two-thirds of the people won’t have a job. All those people still have a job.”
Translation for SaaS founders: Your customers will adopt AI capabilities gradually. Plan for steady integration, not overnight transformation.
What’s Actually Happening with Developer Headcount
Everyone assumes AI coding tools mean you need fewer developers. The data from Thoma Bravo’s $30 billion revenue portfolio says otherwise.
“We have about the same number of developers in our portfolio as we did a year ago.” But — and this is crucial — “they’re producing more product for their customers and less expensive products and products that they can adapt to what the customer needs quicker.”
AI isn’t replacing developers. It’s making them more productive. The companies that recognize this get an enormous competitive advantage. More features. Faster iteration. Better customization. Same cost base.
The Exit Environment: Lower Multiples, Higher Value Creation Required
Reality check time. Software companies aren’t selling for 25x EBITDA anymore. “They’re selling closer to 15 times EBITDA.”
The implication: “You better add enough value, that alpha that our industry should create, so that you can still generate the liquidity and the returns to your investors.”
IPO markets are open — “just open for the very nice companies.” The 2021 revenue multiple environment isn’t coming back. “Valuations are a lot more reasonable.”
For founders, this means operational excellence matters more than ever. You can’t rely on multiple expansion. You need real business transformation.
The Flight to Quality in Private Equity
The private equity shakeout is accelerating. LPs haven’t had enough liquidity to redeploy capital. They’re looking at five-year performance versus the S&P and making cuts.
“The boards of these big state pension plans and sovereign wealth funds [are] saying the performance over five years doesn’t look that great versus the S&P. The liquidity is not there. Just focus on your top managers only.”
It’s a flight to quality. For firms like Thoma Bravo with consistent track records, “we have that opportunity as well.”
The Alpha Game: Why Consistency Beats Market Timing
Bravo was clear about what drives success in private equity: “Our business in private equity is about alpha. It’s not about market timing.”
The key is consistency. “Sometimes you’re buying more than selling. Sometimes you’re selling more than buying. It could happen. But the trick to and the key to our business is consistency. Consistency of buying and consistency of selling.”
The firm should be able to “buy a great software company that we can add a lot of value to in that $1.5 trillion economy at any time.” But they must also “be able to turn that asset into cash consistently so our investors can come back to us and replenish us with capital again.”
This is the discipline that separates the winners from the losers in the current environment.
What This Means for B2B and SaaS Founders
- First: Don’t chase AI valuations if you’re burning cash. The bubble will pop. Build a profitable business first.
- Second: Do invest aggressively in AI capabilities for your core product. Your customers want agentic solutions and better workflows. This is real demand, not hype.
- Third: Understand that “AI will replace X” narratives are almost always wrong in the near term. Focus on augmentation, not replacement.
- Fourth: If you’re running a profitable, scaled enterprise software business, this might be the best time in a generation to build. The tailwinds are enormous. The competition is burning cash. The winners will be those who combine profitability with smart AI investment.
- Fifth: Prepare for a 15x EBITDA exit environment, not 25x. This means you need to create real value, not just ride multiple expansion.
- Sixth: The specialists will win. “Not all software is going to be a winner in AI,” Bravo warned. “That’s why it’s important to be a specialist in the space, whether you’re in the private market or in the public market.”
Why Orlando Bravo Is Working Harder Than Ever
After founding Thoma Bravo and completing 600+ software acquisitions over 30 years, you’d think Bravo might be coasting. The opposite is true.
“I’ve been working the hardest I’ve ever worked in 30 years of being in private equity,” he said. Why? “The new technology. 100%.”
His pipeline is full on both buying and selling. But it’s more than that: “I feel that our team, for 30 years since we started and we’re a product of the dot-com bubble burst, has been training all of our lives over 600 software acquisitions for this opportunity that we have now, which is to buy the market leader, transform that market leader, and push it into the next generation of AI.”
“That is way too exciting to slow down or think about doing anything else.”
The Bottom Line
Orlando Bravo’s message is clear: AI valuations are crazy, but AI’s impact on enterprise software is real and massive.
The key is discipline. “At the end of the day, profitability and growth have to go together.”
The firms and founders who understand this — who can add AI capabilities while maintaining profitability, who recognize that technology adoption is evolutionary, who build for the long term — will win the next decade.
For SaaS founders in the trenches: The opportunity is real. The path is clear. Build profitably. Integrate AI thoughtfully. Focus on customer value. The $1.5 trillion tailwind is just beginning.
And if one of the world’s most successful software investors is working harder than ever after 30 years in the business, that should tell you something about the magnitude of what’s happening right now.
Watch the full CNBC interview with Orlando Bravo here.
