What will happen to PE Software/Saas portcos
Are these zombies at this point or will they just re-rate given what is happening with AI?
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Also interested given where the tape of Public SaaS co’s are…is vista/TB cooked?
Comment from m_1 below is spot-on. TB & Vista overpaid for a ton of shit in 2021, but I’m quite confident they’ll find their footing with the new SaaSverse in the AI world (if they don’t, don’t know who will)
Still money to be made in software PE, but wont be from the traditional SaaS model businesses that benefited from multiple expansion. We’re already seeing a slight investment approach away from traditional SaaS - see TB’s acquisition of Accelerant and all kinds of creative stuff that Silver Lake is doing with their portfolio
Bump
I think there's still a lot of high quality SaaS. IE the more infrastructural flavored stuff like vertical specific ERPs, great investments. I’m not about to move ERPs to save low 6 fig a year, the math doesn’t work! It’s way way too risky and an insane amount of hours.
But PE and VC both overpaid for a lot of turds that were not technically hard to replicate even in 2020/2021... That is a bigger problem than AI. IE they invested assuming subscription = strong moat like an ERP but that isn't really true...
I have at least 5 or 6 friends that were bought out at insane multiples back then, and they were incredibly confused why they were being valued so high lol.
Bump
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