Arrowroot Capital Management

Arrowroot Capital Management is a growth equity firm based in Santa Monica, California, specializing in investments in B2B software companies. The firm targets businesses with strong recurring revenue models that are typically at a growth stage, often profitable or approaching profitability. Their investment philosophy centers on providing capital and strategic support to help software companies scale operations, expand market reach, and enhance product offerings without requiring a full buyout. They focus on sectors such as enterprise software, cybersecurity, fintech, and healthcare IT, seeking out companies that demonstrate significant potential for market leadership and sustainable growth.

The firm's investment strategy is characterized by a hands-on approach, where they partner with management teams to accelerate growth through operational improvements, strategic acquisitions, and talent recruitment. Arrowroot Capital typically looks for companies with annual recurring revenue (ARR) in the range of $10 million to $100 million, indicating a proven product-market fit and a solid customer base. They aim to be a value-add partner, leveraging their deep industry expertise and network to help portfolio companies navigate the complexities of scaling a software business. This collaborative model is designed to foster long-term value creation for their portfolio companies.

Arrowroot Capital Management typically deploys initial equity checks ranging from $20 million to $100 million, though they have the capacity to participate in larger transactions through co-investments. With over $2.9 billion in assets under management, the firm has built a substantial portfolio of over 50 platform investments since its inception. Their track record includes numerous successful exits, underscoring their ability to identify and nurture high-growth software businesses. The firm's consistent focus on the software sector allows them to develop specialized insights and resources that benefit their portfolio companies throughout their growth journey.