When considering Opportunity funds, people are continuously thinking about real estate. However, Bain Capital manages more than $100 billion, and they plan to raise $1 billion for a tech-focused fund.
This fund will invest in takeovers and late-stage minority investments. Bain Capital is a 35-year-old private equity firm known for companies like Varsity Brands and Toys R Us. Their new fund, Bain Capital Tech Opportunities, intends to target $50 million to $200 million equity investments. These investments will be largely focused in enterprise software and cybersecurity according to a source, who will not be named because they intend on keeping their plans private.
Bain plans to vender its knowledge in finding international opportunities and forging partnerships with other portfolio companies. Bain sees a breach in the software market for capital funding. The firm is searching for companies with annual recurring revenue of $30 million to $100 million and valuations of less than $500 million.
After researching industry verticals in tech, Bain, in the past year has discovered several investment opportunities. These opportunities are too small for its private equity funds. Nevertheless, there are high amounts of cash pouring into tech start-ups from the $100 billion SoftBank Vision Fund, hedge funds, mutual fund companies and multibillion-dollar growth funds from Sequoia, Insight Venture Partners and others.