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Transcript
ADAM ELSTER, GUEST:
The best thing that happened right after the deal was done was A.J. and the team always started with, "What do you need to get this to go bigger and faster and more forward in the market?" And to me, I would tell my team the same thing, it annoys A.J. when I say it sometime, like, "Dude, they will give us a blank check if you can show a return on that investment."
A.J. ROHDE, HOST:
You think like a business owner. That's the big difference between a lot of CEOs, especially in software and in tech, is you... capital allocation for you is a big deal. Like, if I'm putting a dollar in here, we need to get four dollars back. I don't just mean financial arbitrage, I mean business value, intrinsic value, cloud value, customer growth. You think like an owner, and that enables us to have a conversation like we're singing from the same hymnal, you know?
ORLANDO BRAVO, HOST:
Welcome to another episode of Thoma Bravo's Behind the Deal. I'm Thoma Bravo founder and managing partner, Orlando Bravo. And in July of 2020, just months into the COVID-19 pandemic, our senior partner, A.J. Rohde, led an incredibly fast acquisition of Majesco with its CEO, Adam Elster, who you just heard from. For over 40 years, Majesco has been a leader in providing technology and software solutions for the insurance business, focusing on property and casualty and life and annuity insurance. And in 2018, tech veteran Adam Elster stepped in to lead Majesco and transition the company's technology to the cloud.
Majesco is a great case study on speed of private equity, which is one of the specialties of my close partner, A.J. Rohde. It's a case study on when you as a future owner of a company, an investor in a company, when you know exactly what you want and exactly what you're looking for and you see it, you can move really fast in terms of the deal-making process. This deal was done very quickly in the middle of COVID in a remote environment. And you can also move very fast in the value creation process of that company. This company was looking to do acquisitions even before we closed the original Majesco deal.
So, let's hear the story behind the very fast deal of Majesco from Thoma Bravo senior partner, A.J. Rohde, and CEO Adam Elster.
ROHDE:
I'm A.J. Rohde. I'm a senior partner at Thoma Bravo. I've been with the firm since 2010, and I run all of our discover funds, which I started about eight years ago. Discover funds are middle-market funds, so we've got three fund families, uh, of control investing, and we have a growth fund as well. The middle market fund or business is called discover. It was lower-middle market when we started it back years ago, and now it's, it's a, it's a little bit bigger, but we're kinda square in the middle market today.
I'm a big people person. I enjoy the personal side of investing. Um, my mom was a psychologist growing up, so I always found it very fascinating, human behavior and ways to work with people and ways people could influence companies. So, that's kinda what winds my clock. So we, Thoma Bravo, generally start with the franchise. So we buy number one, sometimes in some certain cases number two in a category. And we will map that category, but the reality is we're really wanting to invest behind market-leading franchises. And then, we will overlay that investment decision with management teams that are probably wound like us, cut from the same cloth, so very competitive in a good way, take the hill sort of operating approach, very fast moving, very action oriented, very decisive. Tend to be fairly ambitious, so we appeal well to the management team that wants to build the company to multiples of its current size. And so not every team is built that way or companies are built that way, but we tend to identify best with those.
And then we like to have a lot of fun. Honestly, we're in the people business. Thoma Bravo, uh, you know, we tend to be very humble, funny, self-deprecating, very flat organization in how we think about investing decisions, and I think that resonates really well with management teams who take their job and their operating decisions very seriously, but may not take themselves as seriously. I think that tends to be a pretty symbiotic kind of interpersonal relationship that we have with most of our companies. So, Thoma Bravo, we've always loved market leaders in industries that tend to be maybe five to 10 years behind the digital transformation curve. You know, industries that need that in their business but maybe because of older line archaic bureaucratic structures or capital hasn't pushed some of those companies fast enough to innovate, which has, of course, changed, the industry may be a little bit of a technology laggard, but doesn't mean it doesn't need technology maybe even more in some cases.
Core insurance was probably the ultimate, the top-right quadrant of that. You had carriers that were very large for property and casualty. You had carriers that spent a lot of their cost on IT, but most of that was on older, monolithic, on-premise software systems. And so we have had a long interest and desire to be an investor around the insurance market, both P&C and life insurance, because that industry tends to be a little bit behind the technology curve. We were lucky enough in 2015 to invest in a company called iPipeline, Internet Pipeline. And that was a e-application, so automating the application process for people applying for life insurance or annuities. And that was an enormously positive experience for us. It was a great market-leading franchise, everything I talked about. Great team, really aggressive operating ambitions, was fairly acquisitive, and we built on that category leadership.
Throughout that journey and even before, we knew Majesco. Majesco historically had been founded out of India, and it was founded with a heavy services model. So, back when a lot of these companies were started, they would do a lot of consulting, a lot of staff augmentation, a lot of support services for the US carriers that wanted to slowly transform their business model. And that was... the Indian labor arbitrage model was quite good and quite powerful for the needs of the market at that time. So I knew Ketan Mehta, the founder and chairman, going back to 2010. Actually, I think when I started at Thoma Bravo. And we kinda watched them slowly transition from a services company to a software company, and it was public. So, we got to watch that progression every quarter.
And I remember, I used to say to my partners all the time, "Majesco is so underappreciated." You know, because it was doing these great things as a software company, but it wasn't getting credit for it. And it took when Adam Elster came in as CEO at the end of 2018 where we got to watch the transformation of the company get put into hyperdrive.
ELSTER:
My name is Adam Elster. I'm the CEO of Majesco. I've been with Majesco about four and a half years and been in partnership with Thoma Bravo for over two now.
ROHDE:
And we knew Adam because we, uh, Adam and Thoma Bravo, we had tried to work together at one of our other portfolio companies. We tried to hire Adam as our CEO. Adam came from Computer Associates. Some of the best executive talent in software, period, has come out of CA. Adam had ran big businesses there that he at one point was the president of the company. And we thought he had a really bright future as a CEO, as a standalone company. And obviously, the Majesco board saw that.
ELSTER:
I've been in the technology industry my whole career. I used to be the president of a Fortune 500 public software company, sold it, was trying to figure out what to do next. My first phone call from a recruiter was, "How'd you like to run Majesco?" I said, "Who's Majesco?" They said, "They're in the insurance industry." I said, "I don't know anything about insurance." And I hung up the phone.
The reason I ultimately took the opportunity at Majesco without knowing Majesco or the industry was it was amazing to me that there was a vertical like insurance, which basically is a foundation to running the world, that had never gone through digital transformation. Every bank had, retail had. You name the industry in your daily life, and you've gone through a digital transformation. But I guarantee, if you write one check during the year, you write a physical check to your insurance company. If you get one manila envelope in the mail with a pile of paper that you don't know what to do with, it's from an insurance company. So that alone gives you the sense of why I said, "Wow, there is an amazing opportunity here to transform this industry that's kinda been left behind."
So when I joined Majesco, said, "I'm gonna come in, I'm gonna turn it into a software company." I probably did the anti-interview where I said, "You shouldn't do this. Why are you doing this? This doesn't make any sense. You can't do it like this." Kinda thought, "There's no chance they're gonna want me," 'cause I was giving it to them sorta right between the eyes. Lo and behold, they agreed to it and gave me control to transform the company. And that's where we went. We've flipped it in a few years from being predominantly services to predominantly being software out of the box, all cloud, low margin to high margin.
ROHDE:
When Adam got hired, we made a call to Adam, like, within a week. "Congratulations. Uh, you know (laughing), welcome to the, welcome to the show. You're a public company CEO now. You have all, all of this exposure and maybe challenges that you didn't have before, right? And you're in the hot seat. And we would love to buy the company if the board," uh, which was largely the original investors that were all based and living, almost all of them, in India, "would ever be interested in having the company go private."
And Adam said, "We're all... you know, we're a public company. We always have a fiduciary obligation, but I do wanna get the work going that I was intended to do." His work for the first year and a half was largely build his executive team based on people that he worked with previously at, at CA and get a lot of the modern software processes in place that actually had not been done at the company. Even though there was good progress, it hadn't become a cloud vendor to the degree it is now. That was his first 18 months. So, we agreed to stay in touch and let him get to work.
And then COVID happened. The markets were very dislocated. Majesco, you could see the progress in its business model, recurring revenue, subscription revenue transformation, in its migration up to selling to larger customers, but the market didn't care. Uh, the market was very volatile. The stock was still very illiquid. And companies that were in that size at servicing a sleepy end market that were going through a very slower, meth- methodical transition, the valuation got smoked. And so I called Adam. This would've been May of 2020 right after COVID started. "Hey, the market's really penalized you, and I think, we think you're doing all this great things. In fact, we think that the market should be rewarding you more than it is. Would you be interested now in taking the company private?"
Adam said, "My board would be interested in that, and if you're serious, I suggest that you guys do the work and submit an offer if you like." That's usually how these things go.
ELSTER:
So, I didn't even know A.J., never met with him. He called me about our deal, and we just hit it off. And honestly, it was a phone call, and you know, again, as crazy as this is going to seem too, I didn't meet him in person until a year and a half after the deal even closed. This is the middle of COVID.
ROHDE:
So, we have an opportunity under NDA to meet Adam, meet his team, hear the story, got to see all the data and the transition of the business all remotely. We never got to meet in person, and this is the first investment I ever made and the last where we bought the company sight unseen. It was nerve-racking. What helped is we knew Majesco for a very long time 'cause it was public, so we could watch that progress for years. That actually is quite helpful. And we ended up talking in, in the interim to about 50 customers, and it was very clear that the customer service, the perception of the Majesco system had unbelievably transformed over the last five, six years. People were really happy.
So, we made the company an offer. And as those things typically original, all of the sudden that put the company in play. Other buyers were contacted. Uh, we had to do all this remotely. We had a signed deal to acquire the business for $13 a share, and the stock had been at seven, so it was quite a nice premium for the public shareholders. And in between that time and our ultimate bid, another buyer came in and said, "We want to buy it too." And so we actually had to deal with an interloper situation where someone had offered to buy at more than we had who had not been in the process previously or had, had been but they hadn't really gotten their act together at a timeframe that, that the board needed. And so we had to then up our price, which we did, and we were ultimately successful. But that was a chaotic time. It was a fascinating time, but in the end, we, we prevailed and I'm glad we did.
ELSTER:
When the press release went out, they were like, "Holy cow, like, crazy." And I would tell you, that's probably the key to why the relationship works so well. We're just a cultural fit, right? We get along. TB understands the software industry. That's what they do. My team and I have been in the software industry our entire careers. We speak the same language. We understand it. We can move quick. And look, fundamental things that we wanted to do lined up with what Thoma Bravo wants to do with all their companies.
ROHDE:
Stick around for my conversation with Adam Elster, the CEO of Majesco. Thoma Bravo's Behind the Deal will be right back. Welcome back to Thoma Bravo's Behind the Deal. Here's my conversation with Adam Elster, CEO of Majesco.
Hey, buddy.
ELSTER:
What's up, man? How you doing?
ROHDE:
Do you remember the time we first met and our conversational topic?
ELSTER:
Yes, it was more about music than it was anything to-
ROHDE:
(laughs) Exactly.
ELSTER:
Had nothing to do with software or anything business related. We just started talking about bands and rock music, man.
ROHDE:
That's how I knew we wanted to make an investment, you know?
ELSTER:
(laughs).
ROHDE:
We, uh, we started talking about Rush, actually, uh, if you remember. So, for those of you in, in, in podcast land, so I, so I'm a, a drummer in a, a dad band. It's sorta my second calling in life. Adam was a real, true singer, uh, and axeman in a really good rock band, but the moment we had... I think I had a Rush poster behind me, and you've got that killer ax behind you. And that was, like, you know, that's the easiest icebreaker in the world for two guys like us, so...
ELSTER:
Yeah. I, I think we, I think most of our texts for at least, probably the first six months of doing the Majesco deal was more about bands and songs than anything to do with the deal-
ROHDE:
(laughs) Exactly.
ELSTER:
... by itself, actually.
ROHDE:
Yeah. Did you see Roger Waters's tour? Yeah, let's go, let's go. So, as you could tell, we're both wired the same way.
ELSTER:
So, I think that was part of it when we first met each other, uh, it didn't really feel like we were doing a deal or having business meetings or that we had just met. The time I met the folks from Thoma Bravo, which was a couple years before this, I hadn't even met A.J. So, I didn't meet him in that process unless it was in a hallway for a minute. Um, and then we started talking about Majesco and business and life, and I don't know, felt like we had met years and years ago and had been working together for years before we even started about, talking about a deal.
ROHDE:
Yeah. And this is where the people element's so important to us. We've always worked with people who take their job incredibly seriously, but not themselves.
ELSTER:
Yes (laughs).
ROHDE:
And you know, any time your humor is self-deprecating, "We're not that good in this, but we could be much better here. But we're pretty good in this," we tend to love just that honest, you know, self-reflective dialog, right? And you are, obviously, you are the upper-right quadrant, in my opinion, of, of that brutal honesty.
ELSTER:
(laughs).
ROHDE:
And, but that, you know, enables us together to be really, identify what we don't do well, what we do great, and how to invest behind the things that we, you know, do great and could do even better.
ELSTER:
And talked to a lot of people about, "What's it like working with Thoma Bravo?" I always start with saying, "All PE firms are not created equal." The one thing they all share is they want an incredible return on their investment, and TB is no different. But that's kinda where the similarities start to end culturally about people who you wanna work with who have the same values, the way to think about things. And I think that, that culturally, that, that is just such an amazing culture that's at TB that fit our culture and all of my team. It was just, that's what made it so natural.
ROHDE:
Yeah. And I think you guys by your personality type are natural risk-takers and sort of ambitious business builder types, right? I mean, that's how, that's what you did at CA. And I think that was probably reflective in your decision to take the job at Majesco in the first place, but you're doing it with a lot of experience to know where to break some glass and make some change and where not to. So if you have that risk tolerance and that change agent mindset but you also have a lot of good experience, you can kind of avoid some corners and pitfalls. And you had that, so I knew if we wanted to build this company to five times its size, we could do that in a timeframe that, you know, is customary. And we could know where to avoid and know where to focus, and that's been true.
ELSTER:
Yeah. No, I think you're right. You know, it's, it's interesting, spend a lot of time, you know, helping some executives with their careers or employees with what they want to do with their personal development. And it's interesting 'cause a lot of people are chasing titles or promotions or pay and things like that, and it's interesting, a lot of people don't love change. They say they like change until you say their name, and then they don't love change. And I always tell these people, "Lemme tell you something. If you wanna be in the technology industry, forget your job. And you don't like change? You didn't pick the wrong job, you picked the wrong field." Because there's only two things I know about technology, number one, it's going to change. And number two, it's going to change way faster than you ever expected. So then if you want to be in this industry, man, you have to lean into it.
And from my perspective, I would rather change myself and what I know and learn more than wait for someone to come along and tell me to do it. I'd rather do it myself, and I think that's where the personalities fit so well and the culture. We want to lean into what's next. I wanna be in front of what's next. I don't want to wait for the wave to hit me, and I think that's why we're so excited about the partnership.
ROHDE:
Yeah. I, I have always in my career, you know, had these spark personal moments that I've met someone within five minutes. I've said, "This absolutely is someone whose clock is wound like ours is." And that was, like, maybe not five minute in the case of Adam, it was like 10 seconds. And then it was, like, okay, how fast can we go? You were asking, "How fast can we go? How big can we go?" Usually, it's us asking that question, pushing a CEO to think more ambitiously. It was the opposite with you, like, "How fast..." I'm like, "Wow, okay. Okay, wait. So yeah, we can go pretty fast, and we can pretty big." And remember, we were having those conversations in a really disruptive time in the world, right?
ELSTER:
Yeah. We were all still thinking if we walked outside 10 feet that we were gonna die. This was literally the first 60 days of COVID when all this stuff was going on.
ROHDE:
And what helped too, Adam, uh, I think a lot for us confidence in you was you are a pick up the phone and call customers, you know, get in the mix with your team kinda guy. You are not a big command and control person from up above, and so you knew exactly what was going on on the streets with your 20, 30 biggest customers, every single one. And what you told us, I remember this, you said, "There is gonna be an acceleration of these digital transformation initiatives. All these programs were put in place to be enacted over five to 10 years. Guess what, guys? It's gonna happen over three years, two to three years." And we were at the very beginning of that because COVID put that, uh, in hyperdrive.
And so the fact that you knew that, had the confidence in that, gave us a lot of confidence to say, "Okay, you know what? He's right and the customers are gonna make that change, and we do have to pace with them, but we can do it now."
ELSTER:
Yeah. And look, the best proof of all that TB and this worked so well and would handle the pace, we actually were buying our first acquisition before we even closed with TB. We closed our first acquisition literally right around the same time we went private ourselves. So, to me, I was like, "Yeah, this is the aggressiveness, the pace that will shift this market." And let me tell you, the one thing that we hear nonstop the last few years is, "Man, what are those guys up to? What are they doing?" Like, everyone, you know, we might not be running, you know, a six-minute mile, but the industry's running, like, a 20-minute mile. So, (laughs) we feel like we are just setting the pace for the industry. You know, the results have been fantastic.
ROHDE:
So, there was a, some inbounds from other PE firms who had done some work, and we didn't know about that at the time in advance of when we, we were doing work. And we, we just, uh, you know, fortuitously called in and check in, like we often do. You said, "You know, it's a good time 'cause we've been approached by some others." So once all those hurdles were clear, then it was a question of value. And we offered a certain deal at a huge premium, as I mentioned before. We were really excited. We thought that was a, absolutely a market-clearing value and premium. The challenge became a, a party who had previously inbounded in the company but had dragged their heels and couldn't get their act together. All of the sudden, they had FOMO, fear of missing out, you know?
And once they saw our deal was announced, and they jumped in and said, "We'd like to buy the company." Now, they had a whole host of issues that were a little riskier around regulatory approval and that sort of thing, but it did force us to have to sharpen our pencil, change our value, and deliver a, a better price for the shareholders. The board had hired an advisor to do that, but we had to then up our price from 13.10 to 16. That was over a three-week window, Adam, if I had to recall. We were remote. We weren't together.
Uh, it was July of 2020. COVID was still rampant, and I remember just waking up every morning and, like, "What is happening?" What is, what is the other side doing? What's the world going to do?" How do we feel about this?" And so I remember it was a very emotional time for me. This wa- this at the time was our largest investment, actually still is one of our largest investments, so it was a big, transformative opportunity for us in a good way, so it was a lot of consternation associated with that decision. But we, we prevailed 'cause we knew it was the right thing to do.
ELSTER:
Honestly, you know, we had just announced a press release that we were going private with TB. I remember 'cause I was on my deck doing the COVID drinking parties, you know, where you set up chairs, like, six feet apart. And my phone rang, and I was like, "What?" And I was definitely not in a state to get on a phone call and start negotiating, but it was clear to me that I better-
ROHDE:
(laughs).
ELSTER:
... get a good night's sleep 'cause I had (laughs) had a few weeks ahead of me. So honestly, that's what I did. I said, "I'm not talking to anyone. Set it for 8:00 AM tomorrow." And kinda had to do a few weeks of diligence, again, with this other party. And look, they made a reasonable offer, but back to culture, honestly, it wasn't a good fit for us. It wasn't gonna be a good cultural fit. It's not what we thought we would get out of the partnership with Thoma Bravo. And luckily, it all worked out and we, we couldn't be happier with the relationship. The number one thing people ask me is like, "Well, how's it been since you guys went private?" And I'm always like, "It's great."
And they're like, "How come you say that? Like, most people, that's not the response." And it was what we talked about. I liked the pace. I liked the culture. I liked the investments. I have not for a day thought, "Oh God, I gotta go call these TB guys and let's figure out..." If anything, I'll be like, "Hey, what do you think about this idea? Let's go do this." It's just been a perfect fit.
ROHDE:
Totally.
ELSTER:
The best thing that happened right after the deal was done was A.J. and the team the first times we met always started with, "What do you need? What do you need to get this to go bigger and faster and more forward in the market?" And to me, that was, like, and I refer to it, I'm like, I would tell my team the same thing, it annoys A.J. when I say it sometime, I'm like, "Dude, they will give us a blank check if you can show a return on that investment." And to me, that was, like, magical. So whatever 10 ideas I had that I couldn't afford, I was like, "Okay, guys. Now let's think big, like, what is it gonna take? What investments?" And logically, look, they wanna know if we're gonna give you capital, we wanna know the return on the investment. And from my perspective, that was the greatest question you could ask me and a little dangerous at the same time, probably.
ROHDE:
Well, and you, you think like a business owner. That's the big difference between a lot of CEOs, especially in software and in tech, is you... capital allocation for you is a big deal. Like, if I'm putting a dollar in here, we need to get four, four dollars back. And, and I don't just mean financial arbitrage, I mean business value, intrinsic value, cloud value, customer growth. So we made some, um, acquisitions and some investments with Majesco that were not financially accretive upfront, right? These were product acquisitions that complemented our suite, expensive, but the right thing for the customers 'cause you know where the puck is going, you know, with your carrier base. And so that doesn't always happen, actually.
We have a lot of companies that it's a little bit more the CEOs are probably a little more risk averse, maybe, perhaps, don't know the market as well, uh, or have their finger on the pulse of that, of that end market quite as well. You, you really understood that. You think like an owner, and that enables us to have a, a conversation like we're singing from the same hymnal, you know?
ELSTER:
Yeah. And look, there's definitely, you know, coming from running a company that was a value company with growth assets, right, that's kinda what we always thought about. We thought about, my whole career, capital allocation, investing for growth. But if you invest in growth, you gotta cut somewhere else to pay for it, and that's just how I think about everything in business, right? If I wanna spend a dollar, I need to go, know that I'm gonna get four. And then if I need to figure out a way to pay for it, I gotta figure out where I can optimize somewhere else to pay for it. Uh, and that's just kinda how we think about the business here. But to your point, a lot of people have been, in growth companies, are worried about growth, growth, growth. And you know, you gotta balance it.
ROHDE:
Oh, and I remember when I asked you, "Would you help mentor some of our other executives?" And you said, "Hell yeah. You know, how can I..." 'Cause I think you're, you're one of those people, your motor's always going, right? Um, you've mentored and have a, a coaching tree that, like, looks like Bill Parcells' or Bill Belichick, right? And so you've got a lot of people that have learned from you, your style, and I thought, "Well, why can't we, at the same time you're running the company, do you have a little bit of bandwidth in your schedule to help sit on some boards of the other companies and help, you know, espouse some of those virtues to other executives?" And you're like, "Absolutely."
And so you've been so helpful and instrumental with Command Alkon and HCSS, and we hope to do a lot more, time permitting, you know, but to work, to get you in the mix and helping the companies. 'Cause I think if I could put up anybody, it would be you in terms of what good looks, what commercial instincts look like, what speed looks like, what the risk tolerance looks like. So, I'm very grateful for that.
ELSTER:
No, look, and I appreciate it. There's a, there's some amazing companies in the Thoma Bravo portfolio with, I mean, such market opportunity, I probably didn't realize in vertical software, having been working in enterprise software. Good news about having no hair, what's left on my face being gray, is I've honestly been there, done that on some of this stuff. So I think for some of these people who know industries incredibly well, like, I can help them set... look around the corner a little bit and say, "Hey, you know, you can make one right turn as opposed to three lefts, and you'll get there way quicker."
Look, the only reason I even took the job at Majesco, i- it wasn't about Majesco. I just had no idea there was a market this large with this much white space for digital transformation. So, I, I mean, I think we're in the early innings of the insurance industry turning into real digital transformation. And then there's so many of these cool other industries that A.J. and his team have tapped into that have such runway and potential, it's really amazing to see.
ROHDE:
I'm a big basketball fan, so I li- like to think of the world in quarters. And I think we are probably the end of the first quarter for digital transformation in insurance, and that is because the insurtech's direct-to-consumer offerings have really pushed the traditional channels to be a lot quicker about underwriting, decisioning, policy, claims, have a much more customer-centric experience so that they can retain their customers. It's very expensive to get a customer for a life insurance or property and casualty insurance product, and so the best bet you have of your carrier is to keep your customers happy. Well, the best way to do that is through technology. And Majesco is a, think about an arms dealer or a toolkit to help the carriers do that. And we have a lot of things in that Swiss Army knife that you can buy from us, and that is because Adam created and has supported a platform strategy.
So, I think that we are very early. We have a platform company that has a toolkit that everybody from bi- very big to very small and from life to commercial P&C to personal P&C can buy from us. That is very unique in our market. We are the only company at scale who has the ability to service all those markets. That was a critical part of our strategy. And, and Adam has supported that fully through investment and acquisition. So, we're happy and we, we don't want the ride to end, maybe is a way to think about it. You know, you want the game to be over at halftime, and so we really are now together trying to find the next big idea or a continuation of our big idea. Together, we are looking at some significant transformative moves to give Adam and his team more to accomplish, and that's the goal.
ELSTER:
Yeah. Look, it, it's been an incredible journey. We've doubled the size of Majesco in the last several years, but we're still nowhere near the size of the opportunity in this market. I mean, the insurance industry, you know, if you take P&C and life, it's like an $8 trillion industry, so we are just scratching the surface, to A.J.'s point, of the market opportunity. And, and it's the kind of market where big, bold moves will be rewarded. So honestly, we talk every other day some other idea like, "Well, what about this? Well, what about this?" It's still kinda the Wild West in the insurance industry of what people use and how much of the industry is actually run by custom software that was written 30 or 40 years ago.
I'm doing... I just hung up with the president and CIO of a for- you know, one of the top-tier insurance companies. We're replacing what they call system 70. It's called system 70 because it went live in 1970. So, that's, like, what we're dealing with. This is not, like, ma and pop forgot to transform. If you turned on TV, you watched their golf tournament one of the last few weekends. These are big companies, so we think the opportunity is still ahead of us, to A.J.'s point, where this ride is really just getting going. And you can still make some big, bold moves and, and this market won't be captured yet, which is really exciting.
ROHDE:
Nobody in this industry has our scale, growth rate and profit margin, nobody, not even close. And that is a tremendous financial asset. And we have a really good customer base and really good NPS scores and really loyal customers, and so that's another huge asset. And we have to take care of those customers as we go through this. So like, we have something that's wonderful, and we just wanna find something that can fit into that or fit with that. And that's a little bit product, that's a little bit market, but that's also a lot of culture, you know, what teams would embrace the Majesco view of the world and value creation. And, and you know, like, like any industry, not everyone is gonna be wound that way-
ELSTER:
Yeah.
ROHDE:
... or raised that way. It just is what it is.
ELSTER:
Look, there's more than a few companies we've talked about who are unprofitable. And I, and when I ask them the question, I'm like, "So tell me how you think about profit or how you're gonna get there," they get uncomfortable. And I'm like, "That's a problem. Like, we need to talk about these things. Thi- this is important." And look, the tech giants are probably helping us a bit now 'cause now they've all woken up that there's a thing called profit, uh, which I find really encouraging. I, I love reading some of these press releases from people who would never say these words, but I think it's gonna put a whole spotlight on a lot of these companies who have not been profitable that, like, you, we really need to understand, what's the plan long term, or it's not gonna be a sustainable business.
ROHDE:
So, the Thoma Bravo Band, of which I'm the drummer, has played live for our firm several times at our annual holiday parties. And you know, each time our set gets a little better, a little tighter, a little more refined. I think with a musician like you, Adam, I think we could take it up to a totally ‘nother step function.
ELSTER:
(laughs).
ROHDE:
So, I'd like to invite you to come play a full set with us this upcoming holiday, and it gives me another excuse to hang out with you for some, some prep time and maybe some jam sessions to get our set list tight before that. So, if you'd indulge us, we'd love to have you, uh, in the band.
ELSTER:
Look, I love hanging out with the TB guys. So, A.J., just really a big thanks to you, but just not to you, it's to your whole team. The culture that you've bred, the team that you've built with Matt, with Peter, with Joe, Samir and the rest of the folks that all work on Majesco, it's just been an incredible partnership, and I know my team feel like they're all just part of the team. We don't view it as owners, and we feel like we're all owners and we're all just one team. But it's really been a pleasure working with you guys.
ROHDE:
Appreciate that. It's all about having fun.
ELSTER:
Absolutely.
ROHDE:
Thank you for listening to my conversation with Adam Elster. If you wanna learn more about the work that he and Majesco are doing to enable insurance carriers to move to the cloud faster and better, visit Majesco.com. Stay tuned for more stories Behind the Deal on our next episode. I'm A.J. Rohde. Thanks again for listening.
BRAVO:
Thoma Bravo's Behind the Deal is produced by Thoma Bravo, in partnership with Pod People. Stay tuned for more stories behind the deals. I'm Orlando Bravo, thanks for listening.
ROHDE:
Rock and roll, baby.
NARRATOR:
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 receive compensation and investment opportunities in connection with their portfolio company roles and, in certain cases, are also owners or portfolio company securities and/or investors in Thoma Bravo funds. Such compensation and investments subject podcast participants to potential conflicts of interest.
