Orlando Bravo, founder of private equity giant Thoma Bravo, has vowed to stay away from cryptocurrency investments following the firm’s ill-fated investment in the now-bankrupt FTX exchange.
A little over three years ago, Bravo introduced FTX as “the world’s most advanced, sophisticated cryptocurrency exchange” and invested $900 million, valuing the company at $18 billion.
In a recent interview with CNBC’s Squawk on the Street, Bravo discussed the collapse of FTX, which went bankrupt in late 2022, and the fraud case against its founder, Sam Bankman-Fried, who is now serving a 25-year prison sentence. Bravo stated that he and his company are done with cryptocurrency investments permanently:
“When you make a mistake and you get hurt by something, our philosophy and my philosophy is you never touch it again.”
It was a rare misstep for San Francisco-based Thoma Bravo, which has emerged as a dominant force in tech investing by orchestrating multibillion-dollar acquisitions of companies such as FTX, cybersecurity vendor Proofpoint and software firms Anaplan and Coupa. The firm has returned an estimated $13 billion to investors in 2023 alone. Its recent notable exits include the $3.6 billion sale of Imperva to Thales Group and the $4 billion sale of Barracuda Networks to KKR.
At the time of its FTX investment in 2021, Thoma Bravo, along with other major investors, was riding the wave of cryptocurrency price appreciation. Bankman-Fried was seen as an industry visionary who had built FTX into one of the largest exchanges in just two years. Bravo expressed excitement about FTX’s potential to “create a new ecosystem for crypto” in a press release at the time. Reports suggest that Thoma Bravo invested around $130 million in the round.
But by November 2022, FTX had collapsed and its value had plummeted to zero as senior executives faced accusations of embezzling over $8 billion in customer funds.
Despite the setbacks, Bravo still sees potential in blockchain, the technology that underpins cryptocurrencies. “I’m a big believer in blockchain,” Bravo told CNBC, calling it a “powerful” tool with a multitude of applications. Still, from an investment perspective, Bravo remains steadfast: “You make one mistake and then you move on.”
*This is not investment advice.