Price:

BUSINESS

Thoma Bravo exit signals SaaS debt crack

Saturday, April 25, 2026 · from 2 podcasts
Behind the BastardsAll-In
  • Thoma Bravo’s Medallia fire sale reveals the collapse of debt-leveraged SaaS models.
  • AI agents are replacing per-seat software, eroding legacy valuations.
  • Shadow banks now bet against the private credit boom they fueled.

Thoma Bravo is handing Medallia back to creditors. The move wipes out billions in equity and signals the end of an era: the debt-fueled SaaS growth model is cracking under AI-driven deflation.

On All-In, David Friedberg argued that the predictable cash flows once seen as bulletproof for leveraged buyouts are evaporating. AI agents now perform tasks - like customer surveys and HR functions - for a fraction of the cost of licensed software seats. Chamath Palihapitiya added that tokens are cheaper than licenses, and enterprises are switching fast. Salesforce and ServiceNow have already seen sharp valuation compression as investors abandon the old 'net dollar retention' gospel.

"The per-seat model is dead. If you can spin up an AI agent for pennies, why pay $50 a month per seat?"

- David Friedberg, All-In with Chamath, Jason, Sacks & Friedberg

Meanwhile, private credit firms - like those behind Tricolor’s subprime auto loans - are repeating the 2008 playbook. As Mia Wong detailed on Behind the Bastards, these non-bank lenders bundle risky loans into tranches, using them as collateral for more debt. JP Morgan already lost $170 million on such instruments. Redemption gates - capping withdrawals at 5% per quarter - mean investor money is frozen when panic hits.

Wall Street isn’t waiting for the collapse. JP Morgan and Barclays are now trading credit default swaps on Blackstone and Apollo funds. They’re not just funding the shadow banks - they’re betting on their failure. As Molly Conger noted, the most profitable move in today’s economy isn’t building, but betting on implosion.

"It’s a casino. The house is now selling insurance on its own collapse."

- Molly Conger, Behind the Bastards

The common thread? Overleveraged systems assuming perpetual growth. Whether in SaaS or auto loans, the model relied on stable cash flows. AI and economic reality have broken that assumption. The result isn’t just a market correction - it’s a structural unwind of the post-2008 financial imagination.

#Regulation#VC#Macro
BlackstoneApolloJP Morgan

Source Intelligence

- Deep dive into what was said in the episodes

Behind the Bastards
Behind the Bastards

It Could Happen Here Weekly 229 • Apr 25

  • A recent "shadow bank run" resulted from unregulated financial firms lending to other shadow banks that subsequently failed, highlighting the system's inherent fragility.
  • Shadow banks, unlike traditional banks, are not FDIC insured and lack capital reserves, enabling them to halt redemptions on funds, as seen with firms like Morgan Stanley and Blackrock.
  • The US private credit market manages $1.3 trillion, while the global market holds $3.5 trillion in assets, with funds typically limiting withdrawals to 5% of their value per quarter before stopping redemptions.
  • Private credit firms invest in risky ventures like subprime auto loan companies, exemplified by JP Morgan's $170 million loss on Tricolor, a firm mirroring the 2008 subprime mortgage crisis by securitizing dubious loans.
  • The zero Fed interest rate era in the late 2010s and early 2020s led to an oversupply of capital that funded highly speculative and questionable investments, including defense, Palantir, and AI firms.
  • Major banks are now trading credit default swaps linked to private credit funds from entities like Blackstone and Apollo, effectively betting on their potential failure and replicating past financial crisis mechanisms.
  • Despite doomer narratives, over half of recently announced data center projects have been halted or stalled, demonstrating significant success in local and state-level efforts against their construction, such as new laws in Maine.
Also from this episode: (11)

Society (4)

  • Andrew Sage proposes that indigeneity can be understood as an identity rooted in a reciprocal, caring relationship with a place, similar to the Haudenosaunee Skywoman mythology, rather than the extractivist approach of settler societies.
  • Indigeneity is also defined by Tayaki Alfred and Jeff Contis as an identity constructed in opposition to contemporary colonialism, reflecting a struggle for distinct survival against forces seeking to marginalize and eradicate indigenous peoples.
  • The UN Working Group on Indigenous Issues (1986) defined indigenous communities by their historical continuity with pre-invasion societies, distinct identity from dominant sectors, and determination to preserve ancestral territories and ethnic identity.
  • Oppression does not inherently lead to a critique of oppression, as historical examples like Kurdish involvement in the Armenian genocide or Liberian settlers oppressing indigenous populations demonstrate.

Politics (1)

  • Many post-colonial states, including Indonesia with West Papua, have suppressed ethnic groups under the guise of national sovereignty, a practice ratified by the Bandung Conference, undermining true decolonization efforts.

Science (1)

  • Indigenous peoples protect 80% of the world's remaining biodiversity, with their management practices in Brazil, Canada, and Australia providing ecosystem support comparable to formal protected areas.

AI & Tech (5)

  • Daniel Moranogama, a 20-year-old college student, allegedly threw a Molotov cocktail at OpenAI CEO Sam Altman's home on April 10, then attempted to break into OpenAI headquarters, stating intent to burn it down.
  • Moranogama's anti-AI manifesto, recovered by the FBI, allegedly included a target list of AI executives and investors, declared his attempt to kill Altman, and outlined his belief in AI's existential threat.
  • Moranogama's views on AI were shaped by YouTube debate videos and, after encountering ChatGPT in high school, he became convinced of AI doomer arguments, joining groups like Pause AI and Stop AI.
  • Moranogama's substack essay (January 2026) argued AI poses an existential risk to humanity, citing rapid technological progress and AI's alleged misalignment with human interests, referencing a 2025 Anthropic study.
  • Moranogama's radicalization reflects irresponsible hype from AI companies and public intellectuals about imminent superintelligent AI, a narrative that Robert Evans argues distracts from real threats like AI-supercharged fraud, which already totals a trillion dollars annually.
#Macro#Banking#Markets#Society#History
All-In with Chamath, Jason, Sacks & Friedberg
All-In with Chamath, Jason, Sacks & Friedberg

SpaceX-Cursor Deal, SaaS Debt Bomb, New Apple CEO, SPLC Indictment, Colon Cancer Spike • Apr 24

  • Toma Bravo is reportedly handing Medallia, a customer experience SaaS company acquired for $6.4 billion in 2021, to creditors, wiping out $5.1 billion in equity due to rising debt servicing costs.
  • Kevin Warsh argues that AI's deflationary effect is reducing business costs, leading to economic expansion as companies reinvest savings from SaaS budgets, but also notes that traditional inflation metrics are flawed.
  • David Sacks identifies a challenge for private equity in SaaS, noting that while public SaaS company valuations are attractive (e.g., Salesforce down 32% in six months), predictable cash flows are jeopardized by AI alternatives.
  • Chamath Palihapitiya claims that venture capital and private equity increase SaaS prices to meet return hurdles, making products overpriced and vulnerable to AI-driven cost cutting and unit price reductions.
  • David Sacks advises founders against venture debt, as it reduces maneuverability, imposes business covenants, and makes companies brittle, contrasting with equity sales that align more stakeholders.
  • Chamath Palihapitiya shared his personal experience with a $420 million credit line almost collapsing, reinforcing his belief that debt makes businesses and individuals vulnerable to market disruptions.
  • David Friedberg criticizes 501(c)(3) non-profit organizations for straying from their IRS-defined charitable activities, suggesting many operate with commercial or misaligned interests.
Also from this episode: (19)

Politics (3)

  • David Sacks, who was in D.C. at the White House, described President Trump as pleasant, genial, and interested in AI issues, contrasting with media portrayals.
  • Chamath Palihapitiya calls for the dismantling of NGOs that 'cosplay as overlords' and urges donors to sue the SPLC, citing $822 million allegedly held in offshore bank accounts.
  • David Sacks posits that civil rights organizations, once achieving their goals, shifted from ensuring equality of opportunity to demanding equality of outcomes, rebranded as 'anti-racism'.

AI & Tech (8)

  • Sacks noted that President Trump advocates for American AI companies to generate their own power, opposing approaches that halt progress and support DEI values through AI.
  • SpaceX has entered a deal to acquire Cursor, an AI coding startup, by the end of 2026 for $60 billion or pay $10 billion for collaboration, aiming to create the world's best coding AI.
  • Cursor's run rate was $2 billion in February, projected to reach $6 billion by late 2026; this deal could significantly boost SpaceX's projected 2026 revenue of $22-24 billion.
  • Chamath Palihapitiya believes the Cursor deal structure prevents SpaceX's S-1 IPO filing from going stale, effectively giving Elon Musk a 50% discount on the acquisition.
  • David Sacks argues the Cursor acquisition is complimentary, providing XAI with coding expertise, enterprise clients, and training data, while XAI offers compute resources and a foundation model.
  • Chamath Palihapitiya highlighted that much of AI's value is realized in writing software, but enterprises are creating inefficient agents, underscoring the need for strong developer environments like Cursor's IDE.
  • David Sacks anticipates a race to develop dedicated, cost-effective cyber models comparable to Mythos, as AI-powered hacking risks drive demand from IT departments and CSOs.
  • Chamath Palihapitiya suggests that many vertical SaaS companies are struggling because AI agents make it cheaper and easier for enterprises to spin up internal alternatives, crushing sales and increasing attrition.

Labor (2)

  • David Sacks points out that government pension plans, unlike corporate 401Ks, are underfunded due to public employee unions, threatening to bankrupt U.S. governments.
  • Jason Calacanis suggests that government waste, fraud, and abuse in California, exemplified by the homeless industrial complex, could be addressed by eliminating a minimum of 20-30% of inefficiencies.

Corruption (3)

  • The Southern Poverty Law Center (SPLC) is facing allegations of wire fraud and money laundering between 2014 and 2023, specifically for funneling over $3 million to informants in hate groups.
  • SPLC allegedly paid an informant, F-37, over $270,000 between 2015 and 2023, who was a member of the online leadership chat group that planned the 2017 Unite the Right event in Charlottesville.
  • David Sacks states the SPLC's fundraising doubled to $136 million after Charlottesville from $58 million in 2016, suggesting the alleged actions were a 'grift' to increase donations.

Big Tech (3)

  • Tim Cook's 15-year tenure as Apple CEO saw the company's market cap increase over 10x and revenue grow from $100 billion to over $400 billion, driven by improved services mix.
  • Jason Calacanis believes Apple under Tim Cook missed key innovations like more practical AR glasses, a killer AI assistant, a self-driving car, a search engine, a television, and consumer robotics.
  • Chamath Palihapitiya argues that Tim Cook was an excellent steward, significantly shrinking Apple's share count by 44% and investing in R&D and proprietary silicon, but faces the challenge of adapting to a more heterogeneous device future.
#Agents#Big Tech#Macro#Startups#Reasoning

Related Stories