Hi all—excited to share that Road To Carry crossed 3,500 subscribers. Thank you! We’ve also welcomed some very senior investors to the readership. One day, I hope to invite them to share their knowledge with the broader audience. Until then, here’s another piece from me.
PE Playbook: Ellie Mae
State of Play
When Thoma Bravo raised $34B in June, I was shocked. Not only is that a staggering amount of capital, but headlines were full of fundraising struggles and a broader slowdown in PE activity.
But the firm came out roaring with a spree of deals. Over the last three months, Thoma took four public companies—Dayforce, PROS Holdings, Verint, and Olo—private for a combined transaction value of roughly $18B.
In a market cluttered with AI chatter questioning the future of software, Thoma has taken a bold stance and bet a meaningful portion of its new fund. Time will tell if it was the right call, but they’re true experts in software take-privates.
Let’s dig into a prime example: the 2019 Ellie Mae take-private that delivered 4x returns and ~$8B of profits in just 18 months.
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Company Overview
Company History
Founded in 1997, Ellie Mae started with a simple idea: bring the mortgage process online. Back then, “digitization” meant faxing fewer forms.
Its flagship product, Encompass, launched in the early 2000s as a cloud-based origination platform covering the entire mortgage lifecycle—from application to closing. Core offerings included:
Product / Service | What It Does | Who Uses It |
|---|---|---|
Encompass® LOS | End-to-end cloud platform for managing loan apps, underwriting, processing, and closing. | Mortgage lenders, brokers, banks |
Encompass Connect / Developer Platform | APIs + tools to plug in credit checks, appraisal, e-signature, and other 3rd-party services. | Developers, fintech partners |
Consumer Connect | Digital borrower portal for online apps, doc uploads, and real-time loan tracking. | Borrowers, retail lenders |
AIQ (AI for Quality) | Automates data validation, document recognition, and compliance checks. | Lenders, QA teams |
Velocify by Ellie Mae | Lead management + sales automation for loan officers. | Mortgage originators, sales teams |
Encompass Compliance Service | Real-time rule engine for TRID, HMDA, and other regulatory updates. | Compliance officers, lenders |