Thoma Bravo Founder Orlando Bravo Swears Off Crypto After FTX Disaster
Private equity investor Orlando Bravo, whose firm Thoma Bravo famously invested in FTX, has declared that he and his company are permanently out of the crypto market following the exchange’s devastating collapse in late 2022. Bravo, who once lauded FTX as the “most cutting-edge, sophisticated cryptocurrency exchange in the world,” now believes that the FTX debacle serves as a stark reminder that "once you make a mistake and once you get burned on something, our philosophy and my philosophy is you never touch it again."
Key Takeaways:
- Thoma Bravo, a leading private equity firm, is abandoning crypto investments after the FTX debacle.
- Bravo believes that while blockchain technology holds promise, the FTX experience has deterred him from further investments in the crypto space.
- The decision comes after Thoma Bravo returned $13 billion to investors in 2023, highlighting the firm’s successful exit from several tech and software companies.
A Turnaround for Thoma Bravo
Thoma Bravo, known for its significant investments in technology companies, had been making headlines for massive acquisitions in recent years. From cybersecurity software vendor Proofpoint to property management software company RealPage and financial and supply chain software developer Anaplan, Thoma Bravo has cemented its position as a major player in the tech landscape.
The firm’s success in these sectors is exemplified by its significant returns to investors. In 2023, Thoma Bravo returned nearly $13 billion to its investors, reflecting its successful exit from multiple companies. These exits include the $3.6 billion sale of Imperva to Thales Group and the $4 billion sale of Barracuda Networks to KKR.
However, the FTX saga proved to be a significant misstep for the firm. Despite a glowing assessment of FTX as the “most cutting-edge” exchange in 2021, the company’s investment of $130 million in FTX turned into a complete loss when the exchange collapsed and its founder, Sam Bankman-Fried, was found guilty of massive fraud.
Blockchain Technology: Promise and Caution
While acknowledging the potential of blockchain technology, Bravo remains hesitant about its future in the investment world. He believes that despite the inherent promise of blockchain, the FTX experience has made him wary of any further involvement in the crypto market. This cautious approach reflects a growing sentiment in the financial industry, as other investors grapple with the complexities and inherent risks of crypto investments.
However, there is a growing recognition among experts that blockchain, the underlying technology behind cryptocurrency, offers significant potential for innovation in various sectors. The ability of blockchain to create secure and transparent networks could revolutionize supply chain management, healthcare, and even voting systems. Despite the uncertainties surrounding crypto as a market, the possibilities of blockchain technology are still being explored and developed.
Thoma Bravo’s decision to permanently withdraw from crypto represents a significant turning point for the firm and perhaps a larger signal within the investment community. While the promise of blockchain technology remains, the FTX fiasco serves as a sobering reminder of the risks associated with the nascent crypto market. As the crypto space continues to evolve, the industry will be closely watching how players like Thoma Bravo navigate this uncertain landscape.
