Software Is Still Eating The World

Software is still eating the world more than a decade after Marc Andreessen first said it.

Companies in every industry are still in the process of transforming themselves into a software-centric companies. And there is still a ways to go.

Value is still being created for both employees and shareholders of smaller technology companies that are executing on their missions and disrupting large markets, even has SaaS multiples have decreased.

Incumbents are still going to pay up to acquire innovative software solutions and execution because they have to.

Perhaps no one is more equipped than Private Equity to capitalize on this in the next decade.

Thoma Bravo being a prime example.

In December of 2020, they acquired financial software company AxiomSL for an estimated $2 billion.

• In March of 2021, they bought another financial software provider Calypso for an estimated $3.7 billion.
• In July of 2021, they merged the two companies together and named it Adenza.
• ~2 years after Thoma Bravo completed the merger of their two new FinTech SaaS companies, Nasdaq announced the acquisition of Adenza for $10.5 billion dollars.
• They will be netting a whopping $4-5B gain on the transaction in just ~24 months, in what's largely considered a "down" market for SaaS.
• Nasdaq is essentially willing to dilute ~25-30% of their entire company in order to make a big, calculated bet into being a leading financial services SaaS provider in addition to a leading exchange.

Should be a fun decade ahead in software.