Thoma Bravo, fresh off recent fund closes, sets big goal for next flagship

Thoma Bravo has become a fundraising machine.

The firm, which last year raised more than $22 billion across three funds, has already brought its next flagship pool to market, targeting $22 billion, according to an LP who has seen the fund pitch.

Thoma Bravo is one of several large shops to bring funds back to market at a quick pace. Thoma’s rival for software deals, Vista Equity Partners, also is expected to launch its next flagship fund in the second half of this year, which sources have speculated could target up to $24 billion (though no official target has been communicated to investors).

Tech has become a major target for private equity. Firms like Thoma Bravo, Vista, Summit Partners, TA Associates and Silver Lake have capitalized on the growing opportunity for deals and LP desire to tap into the frantic growth of the sector, which has only accelerated since the pandemic forced businesses to build out their tech capabilities.

In the first half of 2021, 198 tech-focused funds collected $105 billion, according to preliminary data from Buyouts. Last year, 365 vehicles raised $180 billion, led by Silver Lake’s $20 billion Fund VI and Thoma’s $17.8 billion Fund XIV, Buyouts previously reported.

“The sector has the strongest demonstrated tailwinds and the strongest demonstrated growth,” Advent International managing partner Bryan Taylor told Buyouts in a previous interview. “It also has the strongest demonstrated resiliency.”

Thoma Bravo XV is expected to hold a first close in November, the LP said. It’s not clear if the pool is capped.

The firm also plans on launching its next mid-market fund, called Discover IV, and its next small-cap fund, called Explore II, in September. Targets for those two funds have not yet been communicated to LPs.

A spokesperson for Thoma Bravo declined to comment.

Along with Flagship fund XIV, Thoma closed its third Discover fund on $3.9 billion for mid-market investments, and its debut Explore fund on $1.1 billion for lower mid-market companies, the firm announced in October.

In late July, the firm agreed to the take-private of Medallia, Inc, an SaaS platform for customer and patient experience. The deal values Medallia at $6.4 billion.

Thoma Bravo is the successor firm to Golder Thoma & Co, launched in 1980 by Carl Thoma and Stanley Golder. Golder Thoma became Golder, Thoma, Cressey, Rauner, according to an investment report from the Los Angeles City Employees’ Retirement System.

GTCR in 1998 split into two firms, one of which was Thoma Cressey Equity Partners, the report said. That firm was formed by Carl Thoma, Bryan Cressey and Lee Mitchell. In 2008, Thoma Cressey Equity was renamed Thoma Bravo after Orlando Bravo joined and Cressey departed, the report said.

Thoma’s 13th fund, which closed on $12.6 billion in 2019, was generating a 73.8 percent internal rate of return since inception, as of September 30, 2020, according to performance information from California State Teachers’ Retirement System.