Season three of Thoma Bravo's award-winning podcast kicks off with a conversation between Thoma Bravo Managing Partner Seth Boro and Mike Capone, CEO of Qlik.
AIR DATE:
January 30, 2025
LENGTH:
23:31
DISCLAIMER:
This podcast is for informational purposes only and does not constitute an advertisement. Views expressed are those of the individuals and not necessarily the views of Thoma Bravo or its affiliates. Thoma Bravo funds generally hold interest in the companies discussed. This podcast should not be construed as an offer to solicit the purchase of any interest of any Thoma Bravo fund.
Transcript
SETH BORO:
I’m Seth Boro, Managing Partner here at Thoma Bravo. Today I'm behind the deal. Will unpack the details of our acquisition of Qlik. With insights from CEO Mike Capone.
MUSIC IN
SETH BORO:
Mike, great to see you here in Miami. Thanks so much for joining us today for our podcast.
MUSIC DOWN
MIKE CAPONE:
Great. It's great to be here. Thanks for having me. This is, this is a hot ticket. I mean, it's easy to get on CNBC and get on this podcast.
SETH BORO:
[chuckles] Well, look, this is the inaugural podcast from the Miami studio. So, you know, we saved it for a very important discussion. You and I have worked together, I was thinking about that today, for longer than any other CEO who I've worked with now consecutively over, you know, since since since 2018, which is awesome.
MIKE CAPONE:
Yeah, its been great. It's been a great run, seven years, and still continue to love my job every day
SETH BORO:
Well, that's great because we love having you in the job. How did you become CEO of Qlik back in 2018? What, um, maybe just walk through that background and also your background?
MIKE CAPONE:
Sure. Well, you know, I've been in tech for almost 30 years. In and around cloud companies. All public, though. I really know a lot about private equity. And one day I literally got a call from some guy named Orlando Bravo and he said, ‘Hey, your name came up in a search that we're doing for this company, Qlik. You were recommended by another portfolio company CEO, and I'd love to sit down and talk to you about it.’ And my first reaction was, ‘I have a job. I'm doing great.’ I was COO of a company. But, you know, Orlando's Orlando. This is why he raises billions of dollars. Right? He’s super compelling. And he talked to me a bit, and gave me the pitch. I then subsequently met you and Andrew and the rest of the team, and Chip and I fell in love with the opportunity and a chance to really do something transformative with great partners. And one thing led to another. And seven years later, here we are.
SETH BORO:
Just remind us, you had a very extensive international career at ADP and then, of course, you were with Health Care Analytics Company. And one of the things that I remember when we met was just your global view, also your operational breadth, because you had really come across a lot of different parts of the business at ADP over your career. But maybe walk through that a little bit, because I think the combination of that ended up being really unique for what was needed at Qlik at the time.
MIKE CAPONE:
Yeah, that's true. It was a unique fit. So at ADP, my background is product. So was a product development. I was an engineer basically to start, and most of my jobs were in and around product. But I had one unique opportunity at ADP, which was to run their global h.R. Payroll outsourcing business. So you can imagine this role where I was literally doing all the payroll outsourcing for some of the world's largest companies. So Ikea and American Express and Citibank, and they operated in 50 countries. So I was literally traveling around the world helping them get up and running on, you know, a global platform. And as part of that, I experienced, you know, lots of diversity, lots of different industries, as well as the opportunity to run kind of a global P and L. And, you know, fast forward when the Qlik opportunity came around, Swedish company operating, we have customers in 100 countries, operations in 30. So it was a really great fit. My technology background, along with my operational background internationally, with TB’s backing. It made a lot of sense.
SETH BORO:
Tell us a little bit about Qlik today, which of course is a different business than when you first started, and the customers it serves and specifically what it does to create value for its customers.
MIKE CAPONE:
It's been a journey. So I like to count actually from the time that TB took Qlik private to fast forward. And I joined about a year or so into that journey. At the time when I joined Qlik was a visual analytics company. I think you remember it was, you know. And it was great at what it did, but it was a market that was quickly becoming competitive. Radio, Microsoft and Tableau and now Salesforce in the mix. And so one of the great things about the partnership was being able to sit down with TB and strategize. What do we need to do to stay ahead amd relevant? And we immediately concluded we need to increase our Tam, right? We need to expand our market. And therein lies the power. The power of TB and its ability to do deals coupled with a really good operational team that we have Qlik. So we set out to actually expand our purview from analytics only to a full and turned data analytics and AI platform. So harnessing the data all the way through, analyzing it and then using modern capabilities like AI to get the most value out of that data. And you know, 14 acquisitions later, we've built basically a whole new company.
SETH BORO:
And of course, you know, the most meaningful of those acquisitions, both from a size and breadth of product and, you know, probably creating really unrivaled strategic platform in the market was Talend, which was a company that was sitting in the Thoma Bravo portfolio, but not one that was part of Qlik. And of course we decided to merge that in May of 23 under your and the team's leadership. But, maybe walk us through why that integration, why that merger was so important, and that acquisition was so important. What the challenges were, but also now the value that we're realizing and our customers are realizing and market.
MIKE CAPONE:
Yeah, completely. So from the first day I got to Qlik in 2018, I felt like Talend would be a really good addition to the portfolio. But it wasn't the right timing. I mean, again, the great thing about TB in the relationship is we stayed close, we talked about it. In the end, TB took the company private on their own, but we always kept in a dialogue about it. And then it just came an opportune moment where we said ‘Now might be the right time’. There were some management changes and things to bring those two things together. So for me it was perfect because it's something I always wanted to do, but it had the benefit of TB being in there for over a year plus actually operationalizing some of the TB playbook. So that made the onboarding for me at Qlik a lot easier. And what Talon brought to my portfolio was really, I think, best in class data transformation, data governance, data quality to go with my data integration capabilities as well as the analytics capabilities in our AI toolset and in today's world of AI, and we're going to talk about this, data quality, data governance is super important because you can see all the bad results that are coming out of AI. That's fed with bad data and that's what Talend helps me fix.
SETH BORO:
Mike, let's talk a little bit about AI. You just brought up, you know, the importance of governance, and data quality, and data infrastructure in the world that we're in today. But actually Qlik has been talking about AI for a long time. Much longer than you might think, given just the prevalence in the market today, with all the consumer facing apps. But maybe give us a history of AI and how Qlik is thought about it over time, how that's evolved, and just sort of where you see it today in the market and how we're using it.
MIKE CAPONE:
Sure. So I think we all know A.I. is not new. I was doing A.I. programming in college, you know, a lifetime ago. What is new is the unlimited horizontal computer pass that we have now with cloud computing. Yes, the algorithms have gotten better and the capabilities have gotten better. And now with the advent of Gen Z, which is a more consumerized version of it, I think it's getting more acceptance in the marketplace. The reality is we launched, Qlik launched our first real A.I. products in the market like five years ago, right? We had something called the Insight Advisor, which was on structured data. We had natural language processing. So this isn't new. And in fact, even some of the quote, you know, ‘new’ innovations by some of my competitors, agentinc frameworks, you know, frameworks, we've had those as well. We acquired a company that we rebranded like application automation, which is essentially agents. So we've been doing this for quite some time. So now this is new. I think what the problem with A.I. is right now is everybody got all excited about it. But in and of itself, it's not transformative. You can't just skip to the end. And I think that's what a lot of companies would want you to believe, that just plug in an LLM and your business is going to totally turn around and it's that's just not it, right? You can't skip to the end. You have to do the work. And Qlik helps our customers do the work. So that capability to harness all of the data, to govern it, to transform it, to make sure you have the right quality of it before you start feeding into AI. That's what we do. And that's where our customers are seeing the real value. Most of our large enterprise deals are with customers who are doing it right by building this foundation. Because at the end of the day, the last mile stuff is going to it's going to change, it's going to involve LLM’s and tools, and you can already see that happening. LLM are going to be a dime a dozen and trust me, what's what's not going to go out of fashion is getting your data in shape for AI. And we like to think that we're the best partner out there for that yet.
SETH BORO:
[00:19:37] Tell us about Qlik Talend Cloud, because that was a big release from the combined company following the merger that you talked about at your big customer event that's now in the market. But, you know, it's really, you know, the innovation there is incredible. And I think it's I think it'd be great for listeners just to understand what you did with that product and what it does and and how you brought that together so quickly, actually after the two companies came together.
MIKE CAPONE:
Yeah. Well, one of the things is, you know, having a dream about acquiring a company, is what you do with it. So we knew right away what we would do if we were able to bring the two companies together. And so Qlik and Talend. We did an acquisition called ATunity that was high velocity change data capture. So basically data integration, any, any source of data mainframes, SFP, cloud systems, any target, Snowflake Databricks and you know, basically any kind of modern cloud data platform, we can facilitate now. We can go through and harness data and move it in. What Talend brought was the ability to actually now transform that data governance, that data, and manage the quality of that data on the fly. So we quickly set about with our product teams integrating those two products into one. So now customers have a one stop shop to be able to actually harness all of their data and govern it and get the quality right going into AI. And we even have something on top of that called our our trust score for A.I. Where you can actually score your data. Like look at the, the quality, the veracity of your data, the consistency of it. And we'll tell you whether this data is actually good enough to feed into a model. And that's really, really important. And as we get to more automation in the world and A.I. starts making decisions that actually get acted on without human intervention, better make sure your data is right.
SETH BORO:
It's incredible. And we see it in the market big time. I mean, just the amount of energy right now, and spend that's going into this data infrastructure space is really exciting. And it really feels like the company is at the right place at the right time after many years of thinking about, you know, the future of this world. And of course, you know, the opportunities that are now being driven from all these new use cases, despite the fact that AI’s been something that Qlik’s been focused on for a long time, is creating significant opportunity for the company. That, you know, opportunity as we thought about it really created a chance for us to take a step back and think about what we wanted to do collectively with the business going forward. And we recently brought in a new investor, and actually, collection of new investors. But, you know, the largest being an Abu Dhabi sovereign wealth fund Adea who has, you know, recently joined the investor group, of course, one of our very important partners. And, you know, be great just to get your perspective on the recapitalization of the business, this investment. And the significance from your perspective and the employees and your just what it means for the company at this time in its evolution and growth.
MIKE CAPONE:
Sure. No, it's a great story. So we put Qlik and Talend together and then we the goal is was, ‘All right, let's take a breath’. We you know, we did this. We got very successful in the integration. But a funny thing happened at that point, which we started to get a lot of inbound investor interest. And so we were approached by a number of different parties, but eventually we got in touch with Adea and honestly, they just got it like they just got it. They really understood the power of AI, but more importantly, they really understood the foundation of AI and what needs to be done. And our conversations were so engaging with them and really so exciting. Like my team got so fired up when they heard about a new investor who really, really wanted to be part of our journey but really also understood everything we're doing. As well as Thoma Bravo understood everything we were doing. So it was really a chance to bring in some new investors, recapitalize the company and really just, you know, set the table for this next chapter. So we're really excited. And to your point, we have a bunch of smaller investors in as well. And there's just there's, as you know, more interest than we could actually handle at the end of the day with the transaction. So imagine sitting in front of your whole company saying, you know, we had more investor interest than we knew what to do with. That was pretty, that was pretty motivating for the team.
SETH BORO:
Now, that’s awesome. And of course we're, at Thoma Bravo, thrilled to continue to be the largest investor in the business and maintaining that incredibly close partnership with you and the company. It's been an awesome partnership over the years and you know, the business has been transformed in such an incredible way, not only operationally, which is, you know, a part of what we always try to do with the businesses we invest in, but also strategically. And, you know, the platform that now sits in the market is so exciting. And I really think that these next handful of years are going to be more exciting than any in the company's history. It'd be really great just to get your perspective on how Thoma Bravo, in partnership with yourself and the team over the years, has been a valued partner to the company. Where you think we've helped you the most. And, you know, just how you describe our partnership, because of course people call you all the time, you know, as references on us, we always give you as a reference. We're about to find out if that's a good decision or not. And look, I'd appreciate it if you said something nice about me because my mom's probably listening to this podcast as well. I'd be curious to hear your thoughts as, right now, our longest standing CEO in the portfolio, actually.
MIKE CAPONE:
Yeah, well, look, this is super genuine and you see me stand up on stage and talk about this before, how much I value the partnership and how fortunate I think we've been. You know, first thing I would say is, look, the last seven years haven't been a straight line and we've had to contend with a lot of external forces, right? The pandemic, I had a large business in Russia that we had to shut down because of the war and inflation. And, you know, so I'd say the first thing that TB brought me was just a steady hand and just a great North Star, right? I never felt like I was alone in any of this, right? There was just a great group of investors, operating partners that you could lean on in turbulent times to actually muscle through some of these really difficult challenges. So that was really important. And then from a strategy standpoint, being able to sit down and work through like, ‘okay, where do we think our you know, where's next? Like, where should we expand our market? What are the key acquisition opportunities out there?’ Really, really helpful. I'd say the most important thing though is like deal making. My team’s two people, right? You know that. So I get such amazing support you know. Used to be Andrew Almeida and now it's Mike Hoffman and Mohnish. But, you know, terrific helping our source deals, helping us finance deals with the cap markets team, the diligence, etc. We've in parallel built a muscle to integrate acquisitions quickly, so it's super complementary. We get the deal done, we all have confidence we can make it work and then we go from there. So that part is amazing. And then, I did I mention the Cap marketing team. Like they're for real, like those guys. Those guys are amazing. We've been able to, you know, do things, you know, raise capital, refinance debt in, you know, very smooth fashion. And with all that adds up to and why, honestly, I don't think I could ever go work in a public company again and why I love working with TB and private equity is because we make decisions. You know, we're decisive and it's just a pleasure to work in an environment where you have a board that's so supportive and we just decide and we go. Violent execution. As a CEO, you can't ask for better.
SETH BORO:
It's really fun. It's it's always fun to sit down with great teams, great leaders like yourself that that want to do more but want to make the right decision and do the right thing for the business and your customers. And I always love when, you know, we're making a decision. We're always thinking about it together. You know, what does this mean for the long term strategic importance of the company? You know, not can we increase earnings next quarter necessarily by buying something really cheap that may not actually add any value to the platform.
It's always about how do we build something really interesting and strategic. And I think that's really benefiting the business today in a, in a really unique way. And given where this market is and how quickly this Gen AI opportunity and the budget dollars have really flowed to that. So all of those small decisions add up and that's the benefit of having a great leader like yourself, you know, at the helm of a company of this importance. So thanks Mike for all that leadership over the years. And of course your teams incredible too. And you know, we’ve worked with, you know, executives at Qlik really since day one. Even before actually you were at the business so it's so nice t o have that tenure.
The company has of course like really, you mentioned it earlier but that lineage in Lund in Sweden is really unique and I'd love to hear a little bit about that. Just, you know, it's not often, of course, that, you know, we come across a company that has made that leap, you know, to be an international business starting, you know, in what's a relatively small town in Sweden. But that culture of the company is just so important. You know, the business has grown up around that in many ways.
MIKE CAPONE:
Yeah. So you pointed out, Lund is this small town in Sweden really centered around a university, Right? And the actual initial product was actually built by academics. But it was an amazing in-memory, you know, associative engine technology that really disrupted the analytics market. The old, like, kind of business objects and cognos types of, you know, kind of old, old school VI platforms. Those patents still exist today and still work, and nobody's been able to replicate it. So it's a strong product. But what you're more referring to is the philosophy that came out, which was this balance of business, but also like social responsibility and commitment to the employees. And that persists. So, you know, through all the iterations of Qlik, we managed to come to this point, you know, 20 plus years later, and we've been able to preserve that connection to society. You know, we give our software in kind to not-for-profits. We work with the UN on human trafficking and climate change. We work with disaster relief organizations. That's remained. And by the way, we've acquired an Israeli company, we've acquired a French domiciled company. So you can imagine putting all those cultures together. But yet we've been able to preserve those roots of doing good for society while at the same time running a really great balanced business of profit and growth. And you can do both.
SETH BORO:
Yeah, absolutely. You've obviously shown that. And like you said in every geography, you've been successful where we've operated. Maybe one last question here, as you think about Qlik and the years ahead, what are your hopes for the business? You know, what would you like Qlik to be, you know, ten, 20, 30 years from now? How do you think about that as you run the business today on a day to day basis?
MIKE CAPONE:
Yeah. Well, you know, I'll give you a sign of how much the employees are excited about this next chapter. And you know this, which is with this recapitalization, my entire leadership team, re-upped right? So everybody wants to stay and everybody wants to be part of this next chapter. And, you know, some have been in for quite a while, but they they feel re-energized, rejuvenated. And here's why. Because we think we've got something unique in the market and we think that this AI wave is just getting started. But it's really going to take a different shape over time. And as it starts to become more mainstream, it starts to be assumed, as you know, in platforms and technologies and vertical SAS plays and things like that, we just want to be there. We want to be ubiquitous. And I will say this all the time. What makes us unique, like a lot of companies talk about, AI like their whole value prop is ‘give us all your data’, right? ‘Give us all your data and we'll make an AI happen for you’. that's not who we are. We meet customers and we work with them the way they want to work with us. And so my, my, my vision for the company is to be that. Be that independent value creating company for all of our employers. That helps them succeed the way that they want to succeed and not impose any paradigm on them. And look, I think that can sustain this company for many, many years to come.
SETH BORO:
Well Mike, Thanks so much for being here today. It is our inaugural podcast from the Miami studio. It's season three episode one. So you're kicking off a big season for us. Sponsorships are at an all time high. And look, we appreciate you being here today on Behind the Deal. Thanks so much.
MIKE CAPONE:
It's a great pleasure. It's been a lot of fun.
MUSIC IN
SETH BORO:
Thanks to Mike for coming on today. If you like this episode, be sure to listen to next week's episode of Beyond the Deal. Our mini series, where we get to ask him anything. I'm Seth Boro. Thanks for joining us.
DISCLAIMER:
Certain statements about Thoma Bravo made by portfolio company executives are intended to illustrate Thoma Bravo's business relationship with such persons rather than Thoma Bravo's capabilities or expertise with respect to investment advisory services. Portfolio company executives were not compensated in connection with their podcast participation, although they generally received compensation and investment opportunities in connection with their portfolio company roles, and in certain cases are also owners of portfolio company securities and/or investors in Thoma Bravo funds. Such compensation and investments subject podcast participants to potential conflicts of interest.
