Thoma Bravo Raises $12.6B For Latest Software Focused Fund

Thoma Bravo, the private equity firm focused on tech companies, is off to a strong start in 2019, raising $12.6 billion for its latest fund.

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The Thoma Bravo Fund XIII, the firm’s flagship fund, was oversubscribed as investors clamored to get in. In an interview with Reuters Orlando Bravo, managing partner at the PE firm, said it was able to raise the money for the fund in a shorter time frame than the previous capital raising efforts. Thoma Bravo opened up fundraising in March and was oversubscribed six months later.

The Chicago and San Francisco based private equity firm, which was founded in 2003, is a big acquirer of technology companies with a focus on software and cybersecurity. It recently spent $2.1 billion to acquire Imperva, the cybersecurity company and Qlik Technologies, the data analytics software company among the slew of other deals it has orchestrated over the years.

In recent weeks rumors abounded that it is in early-stage discussions with McAfee’s owners TPG Capital and Intel about acquiring it. During 2018 Thoma Bravo was an active player in the software and security markets making twelve investments and closing its $2.4 billion mid-market focused fund the Discover 11. It has completed more than 200 software and technology acquisitions over the years with an aggregate value of around $57 billion. "The number and size of private equity investment opportunities in enterprise software and technology is expanding,” Orlando Bravo said in a press release announcing the close of the fund. “Our firm's investment and operating philosophy continues to deliver excellent operating results for our companies.”

The Thoma Bravo XIII Fund is the largest pool of capital raised to invest in enterprise software companies, enabling the PE firm to acquire and build software companies of the future. The investors in the latest fund include sovereign wealth funds, public pension funds, multinational corporations, insurance companies, endowments, foundations and family offices, the PE firm said when announcing the fund’s closing.

While Thoma Bravo has the largest fund focused on the software market it is not alone in looking for mergers and acquisition opportunities in the space. Software is expected to dominate the M&A market in 2019 as companies and private equity firms look to snap up the more innovative and groundbreaking ones. Software companies are attractive to PE firms because they offer recurring revenue, the ability to generate a lot of cash and the potential for tie-ups and consolidation. As it stands, the software market is fragmented with a lot of small players vying for the attention of big companies. That provides a big opportunity for PE firms to jump into the market and acquire a number of emerging growth software companies to create one behemoth.