In 2026, the global capital market is welcoming a new signal.
A private equity institution focused on technology investment has completed a fundraising of more than 100 billion RMB.
Recently, Francisco Partners, a leading global private equity firm in the technology track, announced that its eighth flagship buyout fund Francisco Partners VIII and mid-cap buyout fund Agility IV have completed their final closings. The total fundraising size of the two funds reached 21 billion US dollars, equivalent to more than 1.4 trillion RMB.
This not only sets the largest fundraising record since the establishment of Francisco Partners, but also becomes a significant event in the global buyout fund market this year.
Over the past few years, the global capital market has gone through a round of obvious adjustments. The valuations of tech stocks have returned to rational levels, venture capital has tended to be prudent, and the corporate financing environment has changed. Capital that used to chase rapid growth has begun to refocus on assets that can generate stable cash flow and long-term value.
And buyout funds are becoming an important tool for this round of capital reallocation.
Different from early-stage venture capital, buyout funds do not mainly bet on immature startups, but look for enterprises that already have a commercial foundation but still have room for growth, to enhance value through capital, management and industrial integration.
The large amount of capital raised by Francisco Partners this time will continue to be invested in technology fields such as cybersecurity, enterprise software, healthcare information technology, industrial software and fintech.
$21 Billion, Where Does It Come From
In the global private equity industry, there are not many institutions that can raise more than 10 billion US dollars in a single fundraising.
Francisco Partners’ completion of the $21 billion fundraising this time reflects a new round of attention from global long-term capital to tech assets.
Founded in 1999, this investment institution is headquartered in San Francisco, the United States. Unlike many comprehensive private equity institutions, Francisco Partners has determined a very clear direction since its inception: it only invests in technology-related enterprises and focuses on controlling buyouts.
Over the past 20 years, it has been making investment layouts around the technology industry.
Compared with traditional venture capital, Francisco Partners has chosen a different path.
It does not mainly look for newly established startups that grow by relying on technological imagination, but focuses on tech enterprises that already have a certain scale but still have room for improvement.
These enterprises may already have mature products, stable customers and commercial revenues, but have not yet fully released their value due to insufficient management efficiency, capital investment or market expansion capabilities.
This is exactly where buyout funds play a role. By acquiring control of enterprises, and then using their own industrial experience to carry out business adjustment, resource integration and strategic upgrading, they finally help enterprises achieve value growth. This model has been developed in European and American markets for many years.
In the growth process of large technology companies such as Microsoft, Adobe and Salesforce, they have continuously improved their business territories through mergers and acquisitions. A large number of small and medium-sized tech enterprises have also obtained new development opportunities through private capital.
Francisco Partners’ continuous ability to attract global institutional capital essentially comes from its investment capabilities formed by long-term focus on the technology industry.
The LPs participating in the subscription this time include long-term capital such as US public pension funds, European and Middle Eastern sovereign wealth funds, university endowment funds, insurance funds and family offices.
The common feature of these funds is that they have a long investment cycle and pay more attention to long-term returns of assets rather than short-term market fluctuations.
The global capital environment has changed in the past few years.
In the low interest rate period, a large amount of capital poured into tech startups and growth enterprises, pushing valuations to rise rapidly. But with the change of the macro environment, capital has begun to re-examine enterprise value.
Some tech companies that were once sought after have begun to face financing pressure. At the same time, a number of enterprises with real business, technology accumulation and customer base have instead become the targets of buyout funds. Because after the valuation adjustment, investment opportunities in these enterprises are increasing. That is why Francisco Partners can complete large-scale fundraising in the current market environment.
For long-term capital, a sluggish market does not necessarily mean fewer opportunities. On the contrary, when asset prices return to rational levels, enterprises with real value may usher in a better investment window.
Technology M&A Is Becoming a New Battlefield
In the past decade, the most concerned form of technology investment has been venture capital.
Startup financing, the birth of unicorns and valuation growth have become the main narrative of the development of the technology industry.
But as the technology industry enters a mature stage, the capital market is changing.
More and more capital is shifting from “looking for the next startup” to “looking for tech assets with proven value”.
This has promoted the development of the technology M&A market.
The five key directions that Francisco Partners focuses on this time — cybersecurity, enterprise software, healthcare information technology, industrial software and fintech — are actually the core sectors that the technology industry has continued to develop in the past few years. These industries share a common feature: they are not as easy to generate short-term explosions as consumer internet, but they have stable business models and long-term demand. Take enterprise software as an example. With the continuous improvement of enterprise digitalization, software has become an important infrastructure for enterprise operation. From customer management and financial systems to supply chain management and data analysis, the demand of enterprises for software services continues to grow.
The same is true for cybersecurity.
With the development of cloud computing, artificial intelligence and digital office, the security challenges faced by enterprises are becoming more and more complex, and the importance of security software and services is constantly increasing. Industrial software is connected to the upgrading of the manufacturing industry.
In the past, the development of China’s manufacturing industry mainly relied on scale and cost advantages. In the future, intelligent manufacturing and digital production will become the focus of competition, and industrial software is an important foundation supporting the upgrading of the manufacturing industry.
These fields share the common feature of large enough market space and long-term growth logic.
This is also an important reason why buyout funds pay attention to the technology industry.
Compared with chasing short-term hot spots, buyout investment pays more attention to industrial trends, and it looks for enterprises that have proved their commercial value and still have room for improvement. In fact, mergers and acquisitions have always played an important role in the development process of the global technology industry. Large technology companies supplement their technical capabilities through acquisitions to quickly enter new markets; small and medium-sized enterprises achieve scale expansion through capital support.
Microsoft’s acquisition of LinkedIn, Adobe’s acquisition of Figma, and Google’s acquisition of a large number of artificial intelligence enterprises are all manifestations of the integration of the technology industry.
In the future, as artificial intelligence further changes the industrial structure, technology M&A may usher in new opportunities. A large number of traditional software enterprises and industrial technology enterprises may become important assets in the AI era. Capital is not only paying attention to AI models themselves, but also to industries that can be transformed and efficiency improved by AI.
This is also an important reason why Francisco Partners chooses to continue to increase its investment in the technology sector. Artificial intelligence is changing the technology industry, but the real beneficiaries may not only be a few model companies, but the entire industrial chain.
Capital Is Waiting for the Next Round of Opportunities
Behind the $21 billion fundraising, what is more noteworthy is the change in the attitude of global capital.
In the past few years, the technology industry has experienced a round of rapid rise. Fields such as artificial intelligence, new energy and semiconductors have become hot spots chased by capital, and a large amount of capital has entered innovative enterprises. But with the change of the market environment, the investment logic is adjusting. Capital has begun to pay more attention to the operating capability of the enterprise itself, rather than simply focusing on the future imagination space.
This means that technology investment is entering a new stage. In the past, capital preferred to invest in “companies that may become giants in the future”.
Now, more and more capital is beginning to look for “companies that have proved themselves but still have room for improvement”.
This is exactly the opportunity for buyout funds. For Francisco Partners, the $21 billion capital is not a simple fundraising, but an advance preparation of ammunition for the integration of the technology industry in the next few years. The development of the technology industry has never been only about entrepreneurship and innovation.
When an industry gradually matures, integration will also become an important trend. Some enterprises need capital to help expand their scale, some need industrial resources to improve efficiency, and some need new strategic directions.
Buyout funds are exactly playing a role in this process. Of course, large-scale fundraising does not mean that all investments will be successful. The technology industry changes very fast, and enterprise value will also change with technological trends.
How to identify enterprises with real long-term competitiveness is a challenge faced by all investment institutions. But it is certain that technology is still the long-term focus direction of global capital. Compared with chasing rapid growth in the past few years, capital now values certainty more.
From venture capital to buyout funds, from early entrepreneurship to industrial integration, technology investment is entering a new cycle.
Francisco Partners’ $21 billion is just a microcosm of this change. In the next few years, with the continuous development of artificial intelligence, digitalization and intelligent manufacturing, the global technology industry will continue to generate new opportunities.
And those capitals that have prepared funds in advance and understand industrial trends are waiting for the next round of value revaluation.
This article is from the WeChat Official Account “Rongzhong Finance” (ID: thecapital), written by Lü Jingzhi, edited by Wu Ren, and published with authorization from 36Kr.