Founder & Managing Partner, Thoma Bravo
Thoma Bravo: SaaSpocalypse is over
Thoma Bravo Founder and Managing Partner Orlando Bravo declares the "SaaSpocalypse" is over, as he hails the impact AI will ...
About Orlando Bravo
Orlando Bravo, founder and managing partner of Thoma Bravo, has been active in multiple media appearances in 2025 and 2026, discussing the state of software investing and the impact of artificial intelligence. At the SuperReturn 2026 conference, Bravo stated that the so-called "SaaSpocalypse" is "finished" and "no more," calling the term "terrible." He argued that software-as-a-service companies are not static and that AI represents a major tailwind for the industry. Bravo also noted that lending for software is "very difficult" due to large asset managers needing to raise money from retail, but said that as a value investor, Thoma Bravo performs better in down markets. He added that large, historic IPOs like SpaceX and OpenAI are absorbing market attention, making it harder for smaller companies to go public in the short term. In other appearances, Bravo emphasized the importance of domain expertise and leadership in distinguishing software companies that will thrive in the AI era. He cited portfolio company Jeppesen, which provides aviation software, as an example of a deep-domain business. Bravo said Thoma Bravo has completed about $3 billion in add-on acquisitions of AI companies and that roughly 50% of new revenue across its portfolio comes from AI-related products. He also expressed optimism about AI's potential, but urged policymakers to regulate it responsibly to avoid job destruction. At Miami Dade College's 2026 commencement, Bravo delivered a speech encouraging graduates to "go for it," drawing on his own career path from Puerto Rico to Stanford and private equity.
Transcript (33 segments)
✨ AI-enhanced transcript with speaker attribution
O
Orlando Bravo0:00
This apocalypse is over. It's finished. No more. And it wasn't a good term to begin with. Look, a lot of people have said a lot of strange things in investing lately, and that's one of the top ones. AI is an enormous, enormous tailwind for software companies. People were assuming that software companies just do one thing and they stay still. But software companies continue to evolve with infrastructure. And I can tell you in so many ways why AI is the biggest thing that happened in the software industry. Now software companies can move to a completely new level of business automation by automating some parts of human judgment. And that's just incredible. But I think the market, at least the public markets, were really spooked by the fact that some large language models could actually do the job of software companies. So what makes you think otherwise? That doesn't happen. It has never been the case that one company can do it all. That one company can be an expert in manufacturing, consumer, distribution, payroll, and all kinds of processes and industries that are out there. That's what software domain experts do. They become the experts in a given field. Like we own a company called Jefferson. They're the experts on aviation. They have been in the aviation industry since 1930. That level of domain expertise is what brings LLMs and brings AI to corporations.
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Interviewer1:32
So software as a service companies could in your view actually benefit from AI, and would you actually now benefit from the low valuation in public markets?
O
Orlando Bravo1:43
Both are absolutely true. Look at our companies. We own companies that in aggregate have about US 35 billion of revenue. And for the most part, our companies today are booming. And why is that? Around 50% of our new revenue is AI revenue, Agentic revenue. So software companies over the next year, maybe over the next couple years, and AI comes together in a new Agentic solution for corporate customers. Now the public markets, and I don't completely blame them, they want to see how this develops. So you may sell some stocks and also there's very high growth areas like semiconductors to invest in. So that's creating a low entry environment for us and we're very excited about it.
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Interviewer2:28
If you look at those software companies, some still have a hard time to actually convince their clients that it's worthwhile paying a lot more for these AI solutions. Do you think it's just a transitionary period?
O
Orlando Bravo2:42
Customers are confused for sure right now, right? What's the ROI for new agentic solutions? What's the cyber security around it? What's the governance around it? And they're being sold by great new startups, by their existing vendors, by LLMs, by the consulting firms. So it is a period of discovery now which creates pressure on the whole system.
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Interviewer3:07
Another topic you have been just mentioning is cyber security. You have been quite a big investor in that space as well. How do you see that space of the market now between now and also the quantum computing capacities coming up? Quantum computing is very challenging for cyber security, right?
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Orlando Bravo3:26
We don't know how that's going to play out. So, I'm going to focus on AI for now. Quantum, we'll talk about it next year. AI right now, right? That's one of the examples of software of how AI is a big boom for cyber security because all these problems are being created like how do you secure an agent? How do you tell the identity of the agent? How do you tell or allow that agent to look at some data or not other pieces of data? It's a big, big problem that these cyber companies are beginning to solve.
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Interviewer3:55
So, but there's also a lot of investment opportunity in that space.
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Orlando Bravo3:59
It's 50% of what we do. So, if you look at one of our latest funds, cyber is literally 50% of our dollars invested.
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Interviewer4:08
I'd also like to pick your brain on the upcoming IPOs because it will be huge, massive, never seen before this type of category. Yeah. So, Open AI, SpaceX, will that be a pivotal moment for the market?
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Orlando Bravo4:23
What a historic moment for capital markets and for technology at the same time. It's just a beautiful thing, isn't it? SpaceX by far the largest IPO in the history by a mile. And I hope it does great, especially since there's so many retail investors involved in this IPO. I hope it really, really does great. Think about it. It combines the epitome of innovation. Space and AI combined into the biggest IPO in history.
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Interviewer4:55
Yeah. And Open AI, they are also now like piling for their IPO. What's your opinion on here?
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Orlando Bravo5:03
I also hope it does great. You know, the future we're going into an agentic future. It's very, very exciting and it's a very positive thing. I was here last year at Super Return and I think one of the LLM leaders made a comment that by this year 50% of all white collar jobs are going to be gone and somebody in private equity made a comment that 50% of the people in this conference wouldn't have a job by next year and look at the conference, you even had security outside, there's more people here than ever before. We're seeing that in our companies. Take development for example, developers, the biggest use case right now for AI in a positive way has been the ability to write code. Our companies, 60% of the code that they write is machine generated. But our number of developers, we have 20,000 of them, they're going up because now they can be a lot more productive. You can try many new projects. You can produce a lot more products that before were too costly or too risky to produce.
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Interviewer5:59
That's interesting that you say that because here in Europe, we also very often discuss AI as a completely job destruction force. So do you don't see that?
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Orlando Bravo6:08
I've seen the opposite also in my own life. Our own private equity firm, we have close to 200 billion under management and we have about 220 people. So we've always been very lean. In a way, we've been like how AI companies want to be, very small project teams, right into the action, quick decision-making. That's the way we've always operated. This is the first time in my 30-year career in private equity where I feel we need more people because we're using AI internally in such a big way to make decisions and connect all the partners together that it gives us a lot more to think about and a lot more to track which is super interesting for us.
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Interviewer6:45
So you mean AI in a way makes us all like smarter because we look at more things to make up our minds.
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Orlando Bravo6:51
You really start thinking about judgment. What decisions are you implicitly making that should be tracked? And what are the unintended consequences of those decisions? And should you change course? And you know what? For young people, AI is going to be amazing. And I'm very, very upset that some people say that it'll destroy entry-level jobs. Imagine those kids that graduate from college are so excited about their first job. You know, you see it in their eyes. And some people are saying that's absolute nonsense. Somebody said that in private equity you don't need associates anymore. Wow. If you define the role of an associate as just doing a spreadsheet, you don't need that. But our associates are now calling on companies a lot more. They're developing relationships with CEOs and we need a lot more of them.
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Interviewer7:39
It's interesting because that's another narrative. It's just quite dominant that you know it's a bit like the cycles we see in investment banking. This is happening now as well. You say that young people are needed, but they will do different jobs, right?
O
Orlando Bravo7:53
100%. And their jobs will become greater. They'll mature a lot quicker. Their jobs will become broader. So if you look at our associates, they're spending a lot less time doing models or comparables than before. And I bother them a lot less because at midnight I can do something really quickly with AI instead of calling them to do it in the middle of the night, which improves their life anyway, which is what they want. But overall now they really get into investing operations in a much bigger way of thinking about business.
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Interviewer8:24
Let me bring you back to the whole topic of Europe because you're also deploying quite a lot of money into European tech. So is it still as attractive as last year and what do you think about how AI is actually deployed here?
O
Orlando Bravo8:38
Look, for us it's even more attractive than last year because when we can see the transactions that we've done have been very positive experiences in terms of performance and in terms of our relationship with management. Europe is a very stable market. There's less of a fear of the SaaS apocalypse in a way and those companies, those software companies are, you know, I'll tell you the truth, they are behind their US counterparts in terms of their agentic evolution and becoming AI-centric companies but that's even a bigger opportunity for us because when we partner with them or when we acquire them in partnership with management we immediately connect them to the agentic world, to the AI world very, very quickly.
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Interviewer9:22
You think one of the benefits as well in investing in Europe is as well that whole theme of European sovereignty because clearly there's a lot of political backing.
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Orlando Bravo9:34
Big time. The data sovereignty now is a big, big deal. In fact, that's one of the use cases of putting up your workloads and your data in space. Think about the protection of data. So we're seeing a lot of companies look at data sovereignty and of course especially as you mentioned in Europe. So with a European-owned fund, with a Euro fund, with a Euro denominator fund, with a European team and European companies, we can have an edge in serving those corporations locally a lot better.
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Interviewer10:02
You're talking about space here as well, right? So are you also interested in space, but or is that not directly connected to like the idea of software?
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Orlando Bravo10:11
That is so early for us. As you know, we're fundamental investors in cash flow and cash flow yield and grinding out operations over time. So that's too early for us.
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Interviewer10:20
If you compare Europe to the United States these days, of course we had a bit of political turmoil in the states last year with independent states, tariffs, now the war. How optimistic are you that like investors can look through these events?
O
Orlando Bravo10:40
I'm extremely optimistic because the power of technology, the power of free markets and the power of entrepreneurialism, wow, is that shining right now and that's alive and well. So that power of business innovation, risk-taking, I am just incredibly optimistic about companies, job creation and the capital markets. And it is a very, very confusing and strange geopolitical world and investing world as well. And my advice to people especially in my field in private equity, the hardest thing to do right now is to stay really focused on what you do well. And you'll miss some great deals. You'll miss some great venture deals. You may not be in every deal. That's okay. Just stay with what you know how to do very, very well. Pay attention to the details and stay focused.
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Interviewer11:34
One last question on regulation and AI because there is a, I would say, an imminent debate about how we can actually develop AI in a responsible way that it cannot like have a self-fulfilling dynamic behind. What do you make of it?
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Orlando Bravo11:55
Of course it has to be regulated and I'm not saying it has to be, its future promise should not be contained and of course the countries are competing in a race for who owns potentially a super intelligence, all that. It, you know, it doesn't mean that you're going to contain that. But look at social media. If we knew then what we know now, would we have regulated it for teens for different use cases? Of course we would have. Yeah, I mean anybody with ethics and good public policy knowing what we know now would have stopped a lot of the uses or a lot of the early uses of social media. AI is very similar in that way.
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Interviewer12:37
What do you think humanity has learned and we regulated before?
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Orlando Bravo12:41
I really hope we've learned and I really hope public policy makers step up and do it in a way that fuels innovation but as you really mentioned very well in a responsible way. Otherwise, why are we doing all this really to destroy jobs and people? That's not the purpose of technology and that's not the way it's going to work.
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Interviewer13:00
So, we need to deploy it in a way in your view that it does serve us and not the other way around.
O
Orlando Bravo13:05
That's the whole point. Technology is there to serve people, to serve corporations, to make jobs better, to make people's lives better, maybe to give you even a little bit more free time so you can do the same output in six hours than in 12 hours like it's happening with our associates hopefully.