The Money Behind the Movement

Part 2 of The Founder's Guide to AI-Enabled Roll-Ups

Three years ago, the idea that venture capital firms would spend billions acquiring accounting practices, call centres, and IT service providers would have seemed absurd. VCs back high-growth software, not mature services businesses with single-digit margins.

But margins can change. And the firms betting most aggressively on AI roll-ups have track records that warrant taking them seriously.

This chapter profiles who's deploying capital, how much, and why their strategies aren't interchangeable. If you're evaluating this space as an investor, you need to understand what distinguishes the players. If you're a founder who might sell to one of these platforms, you need to know what each buyer actually offers beyond the headline price.

Capital on the Table

The commitments are substantial enough to reshape industries:

• General Catalyst: $1.5B allocated from its $8B fundraise to the "Creation Strategy"
• Thrive Holdings: $1B+ evergreen vehicle launched April 2025
• Bessemer Venture Partners: Co-investor in Crete, CRI partnership
• Lightspeed: Roll-up plays in engineering services, healthcare
• 8VC: Sequence Holdings, Arcos (both in stealth)
• Slow Ventures: Teamshares, Metropolis ($1.6B parking lot roll-up)

Total identified: $3B+ to this specific strategy. Adjacent approaches add billions more.

Why is venture capital—not private equity—driving this?

Traditional PE optimises what exists. Cut costs, centralise operations, and sell within 3-5 years. The value creation comes from efficiency and multiple arbitrage.

AI roll-ups require building something new. Develop AI tools, integrate them into operations, and create feedback loops that improve automation over time. That's technology development, which is VC territory. The result is a hybrid: PE acquisition strategy with VC technology development. The firms deploying capital understand both worlds.

General Catalyst: Build First, Buy Second

General Catalyst pioneered this model through its Creation Strategy, which inverts how technology companies and customers typically relate.

Instead of building software and selling it to service businesses, GC incubates AI-native companies that then acquire those businesses outright. The acquired companies become customers, distribution channels, and data sources for the AI platform—while generating cash flow to fund more acquisitions.

Marc Bhargava, who leads GC's efforts here, frames the opportunity simply: "Services globally is $16 trillion in revenue a year. In comparison, software is only $1 trillion globally."

Fifteen times larger. That's the prize if AI can bring software-like margins to services.

The Portfolio

Crescendo (call centres) is the clearest proof that the thesis works. Gross margins of 60-65%—roughly four times industry average. That single number explains the $500M valuation after the October 2024 Series C. When they acquired PartnerHero (2,800 employees, 200+ enterprise customers), they absorbed a company that should have been an acquirer itself.

Long Lake (HOA/multi-vertical) hit $100M EBITDA in under two years—a pace that makes traditional PE roll-ups look glacial.

• Raised: ~$670M
• Acquisitions: 18
• Productivity gains: 25-30%

Titan MSP (IT services) demonstrated it could automate 38% of typical MSP tasks through pilot programs. GC led a $74M investment in August 2025, funding Titan's acquisition of RFA (400+ financial services clients).

Eudia (legal) went straight for enterprise clients. Fortune 100 customers include Cargill, Del Monte, and Stripe. Fixed-fee legal services powered by AI, rather than hourly billing. Recently acquired Johnson Hana, an alternative legal services provider.

Dwelly (UK property management) offers the clearest before/after comparison. Six agencies acquired, and wherever AI is fully deployed, EBITDA margins doubled, repair wait times down 40%. The math works. The question is whether it scales.

Accrual (accounting) raised $16M as GC's entry into CPA firms—an alternative to Thrive's Crete model in the same vertical.

What Makes GC Different

Three things stand out.

First, they build before they buy. The AI capabilities exist and have been proven before acquisition capital gets deployed. That's backwards from PE firms, which acquire first and figure out the technology later.

Second, permanent capital. No fund lifecycle forcing exits. GC can wait a decade for the transformation to compound. A PE firm with five-year funds doesn't have that luxury.

Third, founder retention as a strategy, not courtesy. Owners roll equity, stay involved, and keep their brands. The portfolio companies benefit from founder knowledge while GC provides technology and capital.

Thrive Capital: The OpenAI Partnership

Thrive Capital is known for concentrated bets held for years—early investments in Stripe, Instagram, Spotify. More recently, they've become one of OpenAI's largest investors, first backing the company at $27B valuation in 2023, then leading a $6.6B round at $157B.

That relationship just got much deeper.

In December 2025, OpenAI announced it was taking an ownership stake in Thrive Holdings—not as a passive investor, but as an embedded partner.

What This Actually Means

The deal goes beyond typical vendor relationships. OpenAI will embed it's research, product, and engineering teams within Thrive Holdings portfolio companies. These teams build custom AI tools for specific industries while gaining access to real-world data that helps train OpenAI's models.

OpenAI receives equity, not cash. If Thrive Holdings' companies succeed, OpenAI's stake appreciates. The structure aligns incentives: OpenAI is motivated to make the AI transformation work because it profits directly from the results.

Some call it a "circular deal"—Thrive invests in OpenAI, OpenAI takes equity in Thrive Holdings, and everyone profits from each other's success.

The optimistic read: aligned incentives for long-term value creation.

The sceptical read: a closed loop where it's hard to tell whether success comes from market traction or from advantages that only work with direct OpenAI support.

I lean toward cautious optimism. But founders considering selling to Thrive should understand they're betting on this relationship staying productive. And they should ask: what happens to my AI capabilities if Thrive and OpenAI ever part ways?

The Portfolio

Crete Professionals Alliance (accounting) is Thrive's flagship. The growth metrics are impressive:

• Founded: 2023
• Revenue: $300M+
• Employees: 900 across 17 offices + Asia operations
• Partnerships: 20+ accounting firms
• New acquisition budget: $500M over 24 months

That $500M budget means roughly 20-30 more accounting firms at typical multiples. Enough to reshape the competitive landscape for any regional CPA wondering whether they're an acquirer or a target.

The AI results are concrete. Bennie Lewis, President of Assurance Dimensions (a Crete-owned firm in Tampa), reported AI tools saved his team "hundreds of hours every month" in audit testing alone.

Shield Technology Partners (MSPs) launched in June 2025 with $100M+ funding from Thrive Holdings and ZBS Partners.

Current state:

• Acquisitions: 7 MSPs (ClearFuze, IronOrbit, Delval, OneNet Global, NetAscendant, BCS365, SK Tech Group)
• Target: Double by Q1 2026
• CEO: Jim Siders, former Palantir CIO (started as helpdesk engineer, ended as CIO)
• Internal products: Sentinel and Spectre (auto-resolve repetitive tickets)

The Siders' hire signals serious intent. Palantir's approach to enterprise AI deployment is widely respected. Bringing that operational playbook to MSPs suggests Shield isn't just rolling up businesses—they're building a fundamentally different kind of IT services company.

Other Players Worth Watching

Bessemer Venture Partners co-invested in Crete and CRI (another accounting roll-up). Brian Feinstein, a partner focused on enterprise software, offers the most honest framing I've seen: "There's not some magic AI accounting product today that automates the audit function or the tax function."

His positioning is instructive: "In a base case, we expect this to be a really good private-equity deal. The tech automation and the AI tailwind are a source of upside that helps us get to a home-run case."

That's the right mental model. PE economics as the floor, AI transformation as the upside.

Lightspeed raised $9B in December 2025, the largest raise in their 25-year history. Partners have made roll-up plays in engineering services and healthcare, though with less public detail than GC or Thrive.

8VC takes a sector-focused approach. Sequence Holdings (Scale AI, Cognition, Lone Pine alumni) operates in stealth, acquiring IT services businesses. Arcos reinvents transactional law as a technology-first platform. Joe Lonsdale's Palantir background shows—the emphasis is on understanding deep workflow structure before automating.

Slow Ventures backs roll-up startups with lower upfront capital. Partner Yoni Rechtman remains sceptical of accounting specifically, citing operational complexity that exceeds what most investors can handle. Worth noting when everyone else is bullish.

How the Strategies Compare

Rather than abstract comparison, here's what actually differs:

The capital timeline difference matters more than it might seem. GC and Thrive can wait for the AI transformation to compound. A PE firm racing a fund clock may sell half-transformed assets because capital needs to be returned. I've seen this happen—"platform" businesses sold before the platform thesis played out.

The AI approach difference matters for the depth of transformation. GC develops capabilities internally and controls the roadmap. Thrive gets direct OpenAI access but depends on that relationship. PE firms buying off-the-shelf tools compete with everyone using the same tools.

The margin targets reflect fundamentally different ambitions. PE aims for incremental improvement within existing business models. AI roll-ups aim for step-function changes to the model itself.

What This Means If You're Evaluating This Space

For investors:

Competition for quality acquisitions is increasing. As more platforms chase similar targets—profitable services businesses with fragmented ownership and automation potential—multiples will rise. The arbitrage that existed when this was novel is narrowing.

The differentiation is now execution. Which platform can actually deliver 30-40% automation? Which can retain founders and maintain service quality through integration? Ask for evidence, not projections.

Early movers have real advantages. GC has been deploying this playbook for three-plus years. Integration processes refined, AI tools trained on real data, portfolio companies sharing learnings. Late entrants face a steeper curve.

For founders considering selling:

You have options. Multiple well-capitalised buyers are competing, which shifts negotiating leverage toward sellers. Terms are better than traditional PE typically offers—brand preservation, equity rollover, operational continuity.

The questions to ask any potential acquirer:

What AI capabilities do you have deployed today? Crescendo's 80% automation rate and Crete's "hundreds of hours saved monthly" are concrete. Vague promises about future AI integration are not. Ask to talk with acquired founders about what actually changed.

What happens to my brand, my team, my role? Get specifics. GC and Thrive emphasise preservation. Some platforms consolidate. The answer matters if you care about legacy.

What's your capital structure? Evergreen means no forced exit timeline. Traditional PE funds have clocks ticking. Ask when their current fund needs to return capital.

Who else have you acquired? Talk to those founders. Their experience tells you more than any pitch deck.

Final Thoughts

The competition for quality targets will intensify. Multiples will rise. Some platforms will overpay for mediocre businesses and struggle to turn them around. Others will build real capabilities and compound for decades.

For founders watching this unfold, the question isn't whether AI roll-ups are real—there's too much capital and too many smart people committed to it for pure speculation. The question is whether any specific platform can deliver what it promises.

Ask for evidence. Talk to founders who've sold. And remember that permanent capital only matters if the people deploying it actually know what they're doing.

← Back to Chapter 1: What AI-Enabled Roll-Ups Actually Are

Continue to Chapter 3: Industries in the Crosshairs →

Or return to: The Founder's Guide to AI-Enabled Roll-Ups (Hub)

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