April 20th 2024.
The renowned investment firm, Vista Equity Partners, has recently made headlines by successfully raising a whopping $20 billion for its eighth flagship fund. Led by billionaire Robert Smith, this expansion of their capital campaign surpassed their initial goal of $17 billion, making it their largest fund to date. In a letter addressed to their investors, Smith expressed the firm's vision of taking artificial intelligence to new heights. He emphasized on the crucial role AI plays in their underwriting process and how they aim to further its value.
Smith wrote, "We have not only adopted generative artificial intelligence as a tool, but also as a pivotal component in our value creation and underwriting processes. This has enabled us to identify and capitalize on opportunities with greater precision and speed, expanding our total addressable market, innovating our products, and strategizing our go-to-market approach. We are determined to stay ahead of the curve in this rapidly evolving market landscape."
The firm recently held its annual general meeting on April 17, where Smith engaged in an on-stage conversation with OpenAI CEO Sam Altman. This discussion shed light on the need for securing a large amount of capital to fully utilize the potential of AI. In September 2023, Smith had written another letter celebrating the completion of 18 monetization events, kickstarting their fundraising season. This included a $4.6 billion sale of Apptio, a platform acquired by Vista in 2019 for $1.9 billion, to IBM. The software provided by Apptio helps customers manage and understand their tech spending. Such lucrative deals helped Vista's sixth fund achieve a 100% return on commitments and a Net TVPI greater than 2x, making it the only $10 billion-plus buyout fund raised since 2016.
TechCrunch reported that Vista recently acquired Model N, a revenue optimization and compliance provider in the pharmaceutical and medical tech sector, in an all-cash transaction valued at approximately $1.25 billion. This marks Vista's fifth acquisition since late 2022, adding to their already impressive portfolio. Other notable purchases include Avalara for $8.4 billion, KnowBe4 for $4.6 billion, and Duck Creek Technologies and EngageSmart for a combined total of $6.6 billion. The completion of this deal is expected towards mid-2024, subject to the usual conditions, including shareholder approval.
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