Thoma Bravo founder vows to ‘never touch’ crypto again after disastrous bet on FTX
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A little over three years ago, private equity investor Orlando Bravo called FTX the “most cutting-edge, sophisticated cryptocurrency exchange in the world,” as his buyout firm helped lead a $900 million investment in the company at a valuation of $18 billion.
Bravo now tells CNBC that he and his firm, Thoma Bravo, are permanently out of crypto after that disaster. FTX spiraled into bankruptcy in late 2022, and founder Sam Bankman-Fried is in the early days of serving a 25-year prison sentence for the massive fraud and conspiracy that doomed FTX and sister hedge fund Alameda Research.
“Once you make a mistake and once you get burned on something, our philosophy and my philosophy is you never touch it again,” Bravo said in an interview on CNBC’s “Squawk on the Street” on Thursday. “Even if it turns out that you missed a big boom.”
FTX marked a sideways turn for San Francisco-based Thoma Bravo, which has emerged as a giant investor in technology, orchestrating multibillion-dollar acquisitions in recent years of companies including cybersecurity software vendor Proofpoint, property management software company RealPage, finance and supply chain software developer Anaplan and spend management software company Coupa.
Last year, Thoma Bravo returned close to $13 billion to its investors, Bravo said at a conference in March. Its recent exits include the $3.6 billion sale of Imperva to Thales Group in 2023 and the $4 billion sale of Barracuda Networks to KKR the prior year.
Founded in 2008, the firm now oversees roughly $160 billion in assets.
At the time of Thoma Bravo’s investment in FTX, the crypto exchange was riding the wave of soaring crypto prices. Bankman-Fried was an industry icon, having built his company into one of the world’s largest exchanges in about two years.
“We are thrilled to partner with FTX on their next phase of growth as they create a new ecosystem for crypto,” Bravo said in the July 2021 press release. His firm’s investment in the round reportedly amounted to $130 million.
By November 2022, the value of FTX stood at zero and top executives were being accused of siphoning more than $8 billion in customer funds.
Bravo said on Thursday that the blockchain technology underlying crypto still has promise. But whether it’s bitcoin itself or a company in the space, Bravo is staying away.
“Personally, I’m a believer in blockchain. I think it’s a powerful way of doing many things and for many use cases, and I’ve always believed that,” Bravo said. “From an investment standpoint, after you make a mistake, you kind of move on.”
