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Investing.com -- Thoma Bravo CEO Orlando Bravo said Wednesday at Semafor World Economy he remains bullish on software-as-a-service companies that demonstrate leadership in a niche and the ability to leverage AI, despite lower valuations.
"There are the most incredible buying opportunities right now in the market," said Bravo, who is founder and managing partner of Thoma Bravo, a private-equity firm with assets under management of $183 billion.
Valuations of SaaS companies have declined this year in the stock market due to concerns about competition from AI, which has proven to be a useful tool for coding software and other tasks.
The selloff has made prices more attractive for companies that fit Thoma Bravo’s investing guidelines, he said.
Thoma Bravo seeks target companies that are the highest quality business in a particular space, usually the number one player, he said. The company must have a management team with deep domain experience, along with momentum using AI to accelerate growth, he said.
"If we can get those three things at these bargain prices, we are huge, huge buyers of these companies right now," he said.
Software-as-a-service companies that are not generating income now may not survive, but already-profitable niche software players with a defensible moat will likely thrive, Bravo added.
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