What are technology private equity firms?
Technology private equity firms invest in tech companies, typically in the form of equity, intending to generate a return on their investment.
Technology private equity firms typically raise capital from institutional investors such as pension funds, endowments, and sovereign wealth funds, as well as from high-net-worth individuals and family offices. They then use this capital to make investments in technology companies, either through purchasing a controlling stake in the company or through a minority investment.
They usually generate returns through growth, operational improvements, and/or a future exit event, such as an initial public offering or acquisition.
These firms typically focus on investing in companies that are in later stages of development and have established revenue streams and customer bases. They may also provide operational and strategic support to the companies they invest in.
Rise of technology private equity firms
Technology private equity firms have become increasingly popular in recent years as technology has become a major driver of economic growth and innovation. They may focus on specific technology sectors such as software, hardware, the internet, e-commerce, healthcare technology, and many more. These firms may also focus on specific regions or countries, such as the US, China, India, and Europe.
Another reason why technology goes so well with private equity is the strength of the software business model. In software, a company’s cash flows tend to be defensible and predictable. That means that banks are more comfortable lending to these firms. This, in turn, means that private equity firms are able to invest in them using a leveraged buyout model.
While nearly all firms contained on this list specialize in leveraged buyout models, note that there are other firms that aim to generate returns through growth in technology or software businesses. This is more popular in growth equity or middle market private equity.
Criteria of top firms
I’ll caveat upfront that this is not an objective or scientific list.
Rather, it’s a subjective list based on which firms seem to be at the top of their game. In a way, I asked myself where would I (as an industry observer) or other industry professionals in the field be MOST EXCITED to work for or to start their career at (if we were starting today).
In the following sections, I list top firms by major city. While many firms have multiple offices, they are listed in the city in which they are headquartered.
Top tech private equity firms in San Francisco
Silver Lake Partners
San Mateo, California
Silver Lake is a firm of tech-savvy investors. They are the driving force behind some of the most innovative and disruptive technology companies of our time. With a keen eye for spotting industry-changing trends and a deep understanding of the inner workings of tech companies, Silver Lake continues to lead the charge in shaping the future of technology.
Select Investments: Dell Technologies, BYJU’s, GoDaddy, Airbnb, Ant Group and many other companies across various industries.
Offices: Apart from their office in Silicon Valley, they have offices in New York, London, Hong Kong.
Menlo Park, California
Accel-KKR are the quiet partners behind the success of some of the world’s most dynamic and innovative companies. Founded in the early 2000s by venture capital firm Accel Partners and Kohlberg Kravis Roberts, Accel-KKR (now independent) has a reputation for identifying the next big thing before it becomes a household name. Whether through strategic investments, operational support or a combination of both, they are dedicated to helping their portfolio companies achieve their full potential and become industry leaders. They are the catalyst that helps companies achieve the impossible and a key player in shaping the future of business.
Select Investments: Pegasus, Salary.com, Recurly
Offices: Accel-KKR has offices in Menlo Park, Atlanta, London, and Mexico City
Hellman & Friedman
San Francisco, California
Hellman & Friedman is a company of extremely smart investors. People in the industry know Hellman & Friedman as some of the smartest folks in the room. Born from the brilliant minds of Warren Hellman and Tully Friedman, this private equity firm has been making waves in the technology investment world for decades.
Select Investments: Formula One, NASDAQ, Checkmarx, Mondrian, Scout 24 and many more.
Offices: Hellman & Friedman has two other offices in New York and London.
- Francisco Partners
Top tech private equity firms in Texas
Vista Equity Partners
Vista Equity Partners, a private equity firm, is a force of innovation and growth. Founded in 2000, they have been at the forefront of shaping the technology landscape and have a reputation for identifying and nurturing game-changing companies. They have a diverse portfolio of companies, ranging from software to digital marketing and have helped them reach new heights of success. Their secret recipe? A unique combination of operational expertise, long-term investment horizon and strategic partnerships sets them apart.
Select Investments: AppFolio, Web.com, Infoblox, Solera Holdings, Cvent
Offices: They have offices in Hong Kong, New York, San Francisco, Oakland, Chicago, Singapore and, of course, Austin.
Top tech private equity firms in Chicago
Thoma Bravo is an incredibly well-respected firm in the world of technology private equity investing. They have a history turning software companies into industry titans (or super high return investments). With a unique approach to investing that’s part art, part science and a relentless drive to see their portfolio companies soar to new heights, Thoma Bravo is a force to be reckoned with in the private equity world.
Offices: They have additional offices in London, Miami, and San Francisco
Top tech private equity firms in Boston
Providence Equity Partners
Providence, Rhode Island (near Boston)
Providence Equity Partners is a private equity powerhouse shaping the media and communications landscape for over 30 years. With over $50 billion in assets under management, they have a portfolio that spans the globe, including companies like Warner Music Group, Blackboard, and Bresnan Communications. Their company portfolio has a combined revenue of over $200 billion, and they have been instrumental in driving innovation and growth in the media and communication sectors. They have a knack for identifying opportunities and providing the resources and expertise that companies need to succeed.
Select Investments: TenStreet, Seesaw, Smartly.io, RentPath etc.
Offices: Providence Equity is headquartered in Providence, Rhode Island with additional offices in New York, Boston, London and Atlanta.
Spectrum Equity was founded in 1999, and it has dazzled the industry with its portfolio of disruptive companies totalling over $10 billion in assets under management. They’ve invested across the technology and software spectrum, including in companies that are revolutionizing how we consume media and transforming how we buy in e-commerce. Spectrum Equity has played a pivotal role in shaping the modern digital landscape.
Select Investments: bitly, customer.io, GoodRx and many more.
Offices: Spectrum Equity has another office in San Francisco, California.
Top tech private equity firms in New York
Warburg Pincus, the global private equity giant, has been a driving force in the world of finance for over half a century. With a portfolio valued at over $60 billion, they’ve invested in some of the world’s biggest and most successful companies. While they invest in other sectors too, they’ve made incredible waves in the software and technology spaces. Founded in 1966, they’ve been at the forefront of industry disruption and innovation, constantly pushing the boundaries of what’s possible in the world of private equity.
Select Investments: BEA Systems, Neustar, CrowdStrike and Avalara
Offices: The firm is headquartered in New York with offices in Amsterdam, Beijing, Berlin, Hong Kong, Houston, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo, Shanghai, and Singapore.
Not necessarily a household name, within the industry Welsh Carson is known as a very strong technology focused private equity firm. (Additionally, they also invest in healthcare.) Founded by Neil H. Welsh and Alan S. Carson in 1979, this private equity firm has been leaving its mark on the world of finance for decades. With a portfolio as diverse as a rainbow and assets under management of over $20 billion, Welsh Carson is a true master of its craft. Whether it’s healthcare or technology, this firm has a knack for identifying and investing in the next big thing.
Select Investments: LINQ, Decision One, Headstrong
Offices: They have another office in San Francisco, California.
STEP-BY-STEP ONLINE COURSE
Everything You Need to Master Growth Equity Interviews
Top tech private equity firms in Washington DC
Carlyle Group, a private equity powerhouse with a $222 billion portfolio, has a storied history dating back to 1987. Founded by a group of Washington insiders, the firm has played a role in some of the biggest deals and controversies of the past three decades
Select Investments: Hack the Box, Abrigo, Agilox
Offices: They have offices across three continents: Asia, North America and Europe.
Top tech private equity firms in London:
Permira is an incredible name in the world of private equity. Founded in 1985, this investment firm has been at the forefront of shaping the future by backing some of the most dynamic and exciting companies globally. With a portfolio spanning various sectors, such as technology, consumer, healthcare, and financial services and over $30 billion in assets under management, Permira is a true heavyweight in the industry, known for its ability to identify and invest in strong technology companies and to generate return.
Select Investments: McAfee, Gocardless, Genesys, Fullstory
Offices: The firm is headquartered in London with offices in California, Paris, Frankfurt, Shanghai, New York
- Vitruvian Partners
- Hg Capital
Top tech private equity firms in Los Angeles
Beverly Hills, California
Platinum Equity is a private equity firm that has transformed many companies into strong performers. Founded by Tom Gores in 1995, this firm has a proven track record of acquiring, revitalizing and growing businesses to achieve their full potential. While Platinum invests in other industries as well, their technology practice is an influential part of its many billion in assets under management.
Select Investments: Solenis, McGraw Hill, Urbaser
Offices: The firm is headquartered in California with offices in Boston, Greenwich, London, Singapore, New York
Software private equity firms
While I’ve used the term “technology private equity firms” primarily in this article, the term is almost synonymous with “software private equity firms” given the ubiquity of software.
However, there is a slight nuance to be aware of: software is part of technology, but technology can include many other kinds of business other than software (e.g. hardware). In this way, if a firm is “technology” investor, they would have a broader criteria than if they were “software” investors.
That said, there is a lot of overlap between software and technology private equity firms since many companies develop software as part of their products.
How to get hired by a top tech private equity firm
Technology private equity is a very competitive industry.
That said, the most common background for new hires at technology private equity firms at the analyst and associate levels tend to include some or all of the following:
- Ivy League or equivalent undergrad experience
- 2-3 years of investment banking or management consulting experience at a top firm
- Track record of excellence in both school and job
- Strong passion for investing and technology, as demonstrated by extracurriculars