Bain Capital Tech Opportunities Fund Says AI Investments Too ‘Speculative’

Bain Capital’s tech fund for growth companies reportedly stands out from others by not rushing to back the latest artificial intelligence (AI) startups.

Darren Abrahamson, a partner on the Bain Capital Tech Opportunities team, told Bloomberg in a report posted Thursday (Feb. 22) that the fund’s focus lies in supporting later-stage companies that are looking to scale and grow with the help of capital and expertise.

“Over time, that will evolve,” Abrahamson said of AI companies, per the report. “But for now, that just feels to us a little bit early and a little more speculative than our focus.”

The fund’s portfolio includes key players in various sectors such as security firm Blackpoint Cyber, healthcare company Athenahealth and sports video analysis firm Hudl, according to the report.

While other Bain Capital funds do focus on cutting-edge investments, Bain Capital Tech Opportunities’ strategic approach involves investing in established businesses, often led by founders and owners, who have already achieved a certain level of scale, the report said.

Despite the growing importance of generative AI tools in enhancing productivity for businesses, the Bain Capital AI fund is not seeking to invest in pure AI companies, per the report. Abrahamson highlighted that while AI tools are leveraged by nearly every company in their portfolio, the fund’s focus remains on established businesses rather than early-stage AI startups.

With a dedicated team based in Europe, Bain Capital’s tech fund is seeking global talent and founders to partner with, according to the report. By identifying businesses across the globe that have the potential for growth, the fund aims to provide the necessary support and resources to help these companies reach the next level.

“Our job is to go find those founders, and often they’re not in places you might expect, but they’re building phenomenal businesses under the radar,” Abrahamson said. “And eventually we’ll get to a size and scale where they want a partner like us to help them sort of scale and grow.”

This report comes at a time when AI is a central focus of investment pitches. At the same time, some investors say that AI success stories are the exception, not the rule, in an overvalued sector.