Orlando Bravo says Tech sector to witness more pain

Orlando Bravo, the billionaire founder of Thoma Bravo, a private equity investment firm that specializes in software and technology-enabled services sectors has said that there’s more pain to come for the technology industry.

The billionaire who reacted to the downward trend of tech market lately said investors asking for a path to profitability are not going to love what they see.

Notably, is the effect of the sell-off in tech stock which is affected by tech giant companies around the globe.

What Orlando is saying

In his analysis, he noted that higher rates make growth-oriented companies’ future earnings less attractive. Hence, tech companies, especially those backed by venture capital, tend to prioritize growth over short-term profitability.

When those companies really start getting down to answering the investor question, the path to profitability, they’re not going to love what they see. That requires a lot of cost reductions, it requires a lot of pain and it’s difficult to execute especially in a public setting.” said Bravo.

What you should know

Orlando Bravo is the first Puerto Rican-born billionaire who owns Thoma Bravo, a firm that focuses solely on software deals.
In 2008, Thoma and Bravo split with healthcare-focused partner Brian Cressey and created Thoma Bravo, a software dedicated buyout shop.
Bravo filled planes with supplies after Hurricane Maria hit Puerto Rico and has committed $100 million to supporting the island’s entrepreneurs.

Why this matters

In 2022, tech stocks have declined greatly as central banks move to tame increasing inflation compared to the previous years when tech led the stock market.
Over the past few months, tech firms have seen their valuations slashed in both the public and private markets.
The US fed on Wednesday hiked its benchmark interest rates by 0.75%, the largest increase it made since 1994.


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