Thoma Bravo Executive Sees 'Exceptional' Software Buying Opportunity Amid Market Panic
Public markets are failing to distinguish between different types of software companies during the current sector-wide selloff, according to a top dealmaker at private equity giant Thoma Bravo, who says the firm is positioned to capitalize on what he calls "panic" selling.
"To think that all software is the same, they're missing the mark a bit," said managing partner Holden Spaht in an exclusive interview on Bloomberg's new Deals television program that aired Wednesday. "We think this could be a really exceptional buying opportunity."
The 'SaaSpocalypse' and AI Fears
Wall Street has been aggressively dumping shares of software-as-a-service (SaaS) providers in recent weeks amid growing concerns that their products might become obsolete in the rapidly evolving artificial intelligence landscape. This dramatic selloff, which some market observers have dubbed the "SaaSpocalypse," has intensified with the emergence of powerful new AI tools from innovative startups like Anthropic PBC.
Thoma Bravo, which has specialized exclusively in software investments since its founding in 2008, has built an impressive portfolio that includes notable companies such as Anaplan, Darktrace, and SailPoint Inc. Just this month, the firm finalized its massive $12.3 billion acquisition of workforce management platform Dayforce Inc., demonstrating its continued confidence in the sector.
AI and Software: An Artificial Distinction
In his revealing interview, Spaht challenged the prevailing narrative that draws a sharp distinction between traditional SaaS companies and the new generation of AI applications entering the marketplace.
"AI is software, software is AI if you do it right," Spaht asserted emphatically. "All of our software companies are using AI, they're selling AI, they're developing AI."
According to Spaht, Thoma Bravo specifically targets software companies with substantial customer bases, exceptionally high renewal rates, and deep, specialized knowledge within their operational domains—whether that domain involves payroll processing, supply chain management, or other critical business functions. Such providers, he noted, "tend to index very well" even in the current turbulent market environment.
Quality Over Hype in the AI Era
While acknowledging that not every company in Thoma Bravo's portfolio performs equally well, Spaht revealed that the overwhelming majority demonstrate strong resilience.
"I'd be dishonest to sit here and say that every company we have indexes as well," Spaht admitted candidly. "But 95% of our companies do index really well in this world of AI because we start with quality of revenue."
This focus on fundamental business quality—rather than speculative AI hype—forms the cornerstone of Thoma Bravo's investment philosophy during this period of market uncertainty.
Private Market Opportunities Emerging
Although most software companies remain privately held, Spaht explained that public market selloffs inevitably create ripple effects that eventually impact private market valuations as well. Thoma Bravo plans to pursue acquisition opportunities in both public and private markets as these adjustments occur.
"It usually takes private valuations a bit longer to adjust but there are people that are very risk off and they're trying to diversify out of software, and so those are opportunities," Spaht observed, highlighting how risk aversion among some investors creates openings for firms with Thoma Bravo's specialized expertise and long-term perspective.
The firm's executives have reportedly met with investors throughout the past week to thoroughly discuss AI's potential impact on their extensive software portfolio, according to Bloomberg News sources familiar with the matter.
