The technology landscape could hardly look more different from when Thoma Bravo launched Explore, its lower middle-market software-focused strategy, in 2019. Lifestyles have been transformed and business models disrupted, first by COVID-19 and then by artificial intelligence (AI).

Yet amid these states of flux – and despite an intensifying battle for assets – Explore’s mission has remained deliberately consistent: backing niche and emerging category leaders before they reach significant scale.

“What changes is everything around us. We used to compete with 20 firms for a deal and now there might be 50. Technology cycles have accelerated dramatically, and now we’re operating in an AI-driven world,” Carl Press, a partner and co-lead of the Explore platform, told Mergermarket.

“[But] we’re still a small group of people making decisions based on consistent principles: the leaders we want to back, the businesses that excite us, and the way we think about creating value.”

Consistency, however, does not mean standing still. As innovation cycles speed up, the team has sharpened its views on the types of companies and leaders most likely to succeed in a brave new world. It is leaning more heavily into what Press describes as “product-led CEOs”.

“We look for founder-led businesses with deep domain expertise. That means a founder or CEO who understands the product better than anyone, knows their customers intimately and spends a huge amount of time with them,” he explained, adding that such individuals have often built their careers specializing in certain industry niches.

“Often it’s someone whose life’s mission revolves around a specific market, whether that’s federal FOIA [Freedom of Information Act], hospital pharmacy software or cardiac imaging.”

This corresponds to the strategy finding plentiful opportunities involving software providers to highly regulated industries – like healthcare – where domain expertise, customer trust and proprietary data command a premium.

Companies serving government, healthcare, banking, and aerospace and defense (A&D) customers fit this profile. “These are categories where you need deep domain expertise, and then you need guardrails and rich proprietary data in which AI can actually create outcomes,” Press said.

Payroll software has been a key focus of late, as illustrated by the firm’s most recent deal, a growth equity investment in Brisbane-based Tanda. The target provides workforce management, payroll and HR software for shift-based workers, serving more than 8,000 customers globally across sectors including hospitality, retail, healthcare and quick-service restaurants.

The transaction, which marked Explore’s first investment in Australia, followed a CAD 650m (USD 456m) take-private of validation software provider Kneat. The company’s customers span regulated industries including life sciences and pharmaceuticals.

In total, the Explore strategy has raised two funds, invested in 14 portfolio companies, and secured two exits since inception, with more reportedly in the works. Mergermarket reported that the firm is in the second round of a sale process for Bluesight, a provider of inventory management, procurement, and compliance solutions for health systems and hospital pharmacies. Meanwhile, it is also reportedly exploring a sale of construction software provider Foundation Software.

The 15-strong team is currently deploying Fund II, which closed in 2022 with commitments of USD 1.8bn.

Strategic evolution

Explore is a USD 3bn business sitting within a broader Thoma Bravo business that claimed approximately USD 170bn in assets under management as of June. It is one of three buyout platforms alongside the flagship large-cap strategy and middle market-focused Discover.

Thoma Bravo began investing in enterprise software in the wake of the dotcom crisis, landing its first buyout in the sector in 2003 and closing its first software-dedicated fund in 2008. Those early funds focused on businesses with annual recuring revenue of less than USD 100m, sometimes going as low as USD 50m, Press noted.

Discover emerged in 2015, a consequence of the flagship funds becoming so large that a dedicated mid-market strategy was required. Press helped A. J. Rohde, who now leads Discover, with the launch.

As Discover itself grew, Thoma Bravo saw space for a more specialized strategy to pursue smaller opportunities. Explore, which closed Fund I in 2020, targets software companies with less than USD 100m in ARR that are established or emerging leaders in niche markets.

“We’ve always found this part of the market particularly exciting,” Press said. “These companies are often high-growth, high-quality, founder-led businesses, which aligns well with our model.”

It seeks to back existing management teams rather than replace them, a philosophy that Press says is particularly well suited to founder-led software businesses.

Explore’s debut investment in Exostar, which operates a supply chain and identity management network connecting major defense contractors with suppliers, displayed many of the traits that remain core to the strategy today.

First, the investment thesis reflected a longstanding interest in identity and cybersecurity technologies. Second, it highlighted an emphasis on long-term conviction. Thoma Bravo had identified Exostar several years earlier and spent the intervening period building relationships and understanding the business before making its move.

Under Thoma Bravo’s ownership, Exostar modernized its platform and streamlined its product portfolio to focus on a smaller number of core offerings. According to Thoma Bravo’s Behind the Deal podcast, revenue grew from roughly USD 60m to USD 85m and EBITDA swung from negative USD 4m to nearly USD 25m before a sale to Arlington Capital Partners in 2023.

In a more recent example, Thoma Bravo undertook a years-long tracking of the FOIA software space, homing in on e-discovery specialist Casepoint and a competitor serving US federal agencies. Both companies were acquired last year and merged under the Casepoint name.

According to Press, the business serves the Department of Defense and processes the “vast majority” of federal FOIA requests.

Face time 

Identifying and cultivating attractive opportunities before a formal sale process is initiated has become more important as competition for assets intensifies. Press cautions that getting access requires patience and a willingness to navigate lengthy middle-market sales cycles. The Explore team accumulates significant air miles to secure regular face time.

“When you first meet a founder, they’re often not ready to sell part or all of their business,” Press explained. “So, you build the relationship over time. Every time you’re in town, you grab a coffee or lunch, check in on the business, exchange updates and stay connected.”

Those interactions are also seen as helping develop pattern recognition and industry insights that can prove key advantages versus peers.

Moreover, the long-term approach delivers a steady flow of non-banked opportunities, with Press suggesting that the majority of Explore’s deals to date have come outside of intermediatory channels. “More than half have been proprietary, with a capital ‘P’,” he said.

Hear more from Carl Press at Private Equity Forum US on 20–21 October 2026 at the Four Seasons Hotel Austin. He will join a panel exploring how AI is reshaping software investing, which business models are proving most resilient and how GPs are approaching valuations, exits and long-term value creation.

Find out more and register here.