Bain’s Max de Groen: ‘Transformational nature of AI has put an increased focus on quality’ in tech investments

The themes of AI disruption in software and private credit have been at the center of investing in the technology sector throughout 2026.

Bain Capital is one of the private equity firms with a wide lens on tech, investing in subsectors like software, fintech, consumer tech, cybersecurity, and healthcare IT, among others. In May, Bain became one of several PE firms to back the OpenAI Deployment Company.

Max de Groen, partner and co-head of Technology, North America Private Equity at Bain, shared insights on how the Boston-based firm is navigating disruption from AI in software and whether the conversation around higher interest rates has affected software investing.

It’s been a slow first half of the year. The market has been dealing with continued uncertainty, which makes it harder for buyers and sellers to align on a fair value for a business.

I’m cautiously optimistic that as we go into the end of 2026 and into 2027, there will be more understanding of what a new normal will look like, and that will lead to an increase in deal volume over time.

Now, there are going to be several challenges with the market seeing a significant increase in deal volume. There are a number of assets that are owned by sponsors that were bought during the 2020-22 time period, when investors paid high prices for assets. It is tougher to grow into those valuations, especially in a world in which software multiples are lower than they were a few years ago.

There have been longer hold periods for some sellers because of that, and we are optimistic that there are going to be a number of well-positioned companies across tech, both in software and in some other sectors, ready to transact.

Whether that’s businesses that we are acquiring from other private equity firms, venture capital, founders or opportunities in the public markets, I am optimistic that we’ll see a growth in activity over the next year.

For several years now, we’ve been highly cognizant of the impact of AI, including the way it is shaping the role of software today and the way software will be developed in the future. As we looked at opportunities in software in 2024 and 2025, we were already taking that into consideration.

The ‘SaaSpocalypse’ ultimately painted the industry with a broad brush, but it didn’t fundamentally change how we were and are thinking about software.

There was a broader recognition around change coming to the software space, and in particular, to the companies whose principal role had been as a lighter-weight workflow engine, and not a mission-critical piece of software built on deep industry data, domain expertise or critical systems. AI has threatened the value proposition of those companies.

We didn’t have any of those companies in our portfolio. Our lens has always been to invest in mission-critical businesses that solve a unique, fundamental problem for their customers. We’re deeply involved with companies focused on systems of record and systems of data and action.

As it relates to the SaaSpocalypse itself, it did change the way a lot of public investors thought about software and the valuation paradigm around it. Of course, over the last few months you’ve seen recognition by the public market that not every software company is going to be affected equally by AI. Ultimately, these dynamics have only reinforced our focus areas and how we think about software businesses.

We look at the market now and believe this is one of the greatest opportunities in recent memory to invest in high-quality tech companies. This is a sentiment shared by our Tech Opportunities and Ventures colleagues.

Together, we are spending a lot of time thinking about which companies are differentially well positioned and how we can leverage our operating capabilities, playbook and AI transformation capabilities to help accelerate their growth.

One of the central themes in tech in 2026 is PE firms navigating higher interest rates with portfolio companies acquired around 2020. Has it affected Bain’s investments in tech? Broadly, will it change investing in the tech sector?

The 2020-22 vintage of tech investments we made is performing strongly. This includes our partnerships with Nutanix, Extrahop and EnterpriseDB. We’ve already realized significant liquidity from a number of those investments.

We were deliberately disciplined throughout that period, with the view that interest rates in that period were unsustainably low, and there was probably an overly robust view of how long rates would stay low.

A lot of investments made during that period can still generate solid returns, even if the path looks different from what investors originally expected. If you backed a company with a differentiated value proposition, real domain expertise, deep integration with its customers and a product or service that remained critical, the business had something durable to build on.

You may need to hold it longer, and you may need to evolve the business meaningfully as AI reshapes the market, but those underlying strengths still matter. The return may ultimately be lower than what was underwritten at the time, particularly if you paid a high multiple, but a high entry price alone does not make a good company a bad investment.

Unfortunately, some sponsors ran into trouble when they paid high valuations for businesses that weren’t as well positioned competitively, weren’t as insulated from AI risk or more exposed to technological disruption writ large.

As investors navigate the current tech landscape, we believe that the transformational nature of AI has put an increased focus on quality, unique value proposition and making sure you’re buying a business that has a durable place in the market.

AI is going to fundamentally transform every business in our portfolio. As we evaluated the DeployCo opportunity, it was clear that the large language models were becoming capable of so much more than initially expected. The models now practically have the capability, depth and expertise of PhDs.

Enterprise organizations were having a hard time making the most of those models because they’ve been trained on the corpus of information that’s available publicly. They don’t have the context of how a company’s core workflows operate. For them to be effective, those models needed context and understanding of that individual company’s problem set and workflows.

As we looked across our portfolio, we found that nearly every company was forming different partnerships and was using AI differently. It became clear to us that starting an organization in partnership with a leading frontier lab would be a powerful force multiplier of our value creation efforts.

When OpenAI approached us about the opportunity, we got excited about that idea and how we could help them build something special and impactful together. We’ve launched DeployCo and are rolling out a number of projects across our portfolio, and we fully expect that to grow over time.

DeployCo is also part of a broader approach. We will continue to work with a range of AI and technology partners on AI transformation opportunities. We’ve had successful previous partnerships with companies like Palantir and BCG X, among others. But what makes DeployCo particularly powerful is the combination of that implementation capability with a close connection to OpenAI and the frontier models themselves.