Who is Diversis Capital?
Diversis Capital is a private equity firm based in Los Angeles that invests in software and technology-enabled services companies. Ron Nayot and Kevin Ma founded Diversis in 2013 and lead the firm as managing partners. Diversis manages more than $3 billion as of October 2025.
The Diversis fund record shows fast scaling. Fund I closed at $255 million in 2019. Fund II closed at $675 million in September 2021, ahead of a $500 million target. Fund III closed oversubscribed at its $1.2 billion hard cap in October 2025, ahead of an $850 million target, with William Blair acting as placement agent. The Los Angeles Business Journal marked Diversis crossing $1 billion under management at the Fund II close, and the firm roughly tripled that figure over the following four years.
Diversis invests from closed-end funds and describes its strategy as operationally focused control investing. Diversis fields operating partners and strategic advisors alongside its deal teams, per the firm’s own deal announcements. A closed-end structure means every Diversis platform is bought to be resold within the fund’s life.
What does Diversis Capital buy?
Diversis buys control positions in lower middle market software and technology-enabled services companies. The firm’s primary geography is North America, with selective investments in Europe and Australia. Diversis states that it works with founders and with corporations, which covers founder exits and corporate carve-outs alike.
| Criterion | Diversis profile | Source |
|---|---|---|
| Company type | Software and technology-enabled services | Fund II and Fund III press releases |
| Market segment | Lower middle market | Fund II and Fund III press releases |
| Deal type | Operationally focused control investments | Fund III press release |
| Geography | North America primary; selective Europe and Australia | Fund II and Fund III press releases |
| Revenue and EBITDA bands | Not published | No public disclosure |
| Check size | Not published | No public disclosure |
Diversis publishes no revenue, EBITDA, or check size bands, so founders cannot self-qualify from public criteria. The portfolio gives the practical answer: Diversis platforms such as Fishbowl, Decision Lens, and Infotech are established vertical software businesses rather than early-stage companies.
What has Diversis Capital actually acquired?
Diversis has built its record on vertical software platforms bought from founders and followed with add-on acquisitions. The table lists Diversis transactions with public dates.
| Company | Business | Date | Disclosed terms |
|---|---|---|---|
| ArrowStream | Foodservice supply chain software | Acquired February 2017; sold to Tailwind Capital December 2020 | Terms not disclosed; PE Hub reported roughly a 10x return for Diversis |
| Performance Designed Products | Gaming accessories | 2021 | Not disclosed |
| Fishbowl | Manufacturing and warehouse inventory software | December 2021 | Not disclosed |
| Decision Lens | Government planning and budgeting software | July 2024 | Not disclosed |
| Infotech | Infrastructure construction software | July 2024 | Not disclosed |
The Diversis Fund II announcement also named Adlib Software, RFi Group, Black Box Intelligence, and Performance Designed Products among portfolio companies. Diversis runs the standard platform-plus-add-on playbook: Diversis-backed Fishbowl acquired Sellware in 2023 and separately acquired its own largest distribution partner.
What does Diversis Capital typically pay?
Diversis does not disclose purchase prices. Every platform acquisition listed above closed without published terms, which is typical for lower middle market software deals. The absence of disclosure means a founder receiving a Diversis offer has zero public comparables from the firm’s own history.
The one public data point runs in the other direction. PE Hub reported that Diversis made roughly 10 times its money selling ArrowStream to Tailwind Capital after under four years of ownership. The spread between the 2017 entry price and the 2020 exit price belonged to Diversis, and that spread is what disciplined entry pricing buys. Kevin Ma has said Diversis portfolio companies have in some cases doubled or tripled revenue organically, which compounds the same effect.
How does Diversis Capital find companies?
Diversis sources deals the way most lower middle market software investors do: direct outreach to founder-owned companies, intermediary relationships, and corporate carve-out conversations. Diversis publicly emphasizes partnering with founders and with corporations, which signals both bilateral founder deals and divestitures. Diversis has not published details of its business development team or a stated posture on banked auctions.
Advisors do appear around Diversis transactions. KippsDeSanto advised on the Decision Lens investment, and Lincoln International ran the ArrowStream exit for Diversis. The pattern indicates Diversis both participates in banked processes and buys directly, like its peers.
What does a Diversis Capital approach look like?
A Diversis approach typically arrives as an email or call from an investment professional describing Diversis as an operational partner to founders. The sequence that follows is standard for software private equity: introductory conversations, a request for financials, an indication of value, then a letter of intent with exclusivity. Standard LOI exclusivity asks run 30 to 90 days, and Windsor Drake recommends conceding no more than 30 to 45 days.
Roughly 1 in 3 signed LOIs fails to close on original terms across the M&A market, so the LOI number is a midpoint rather than a finish line. Windsor Drake’s first-response playbook for any inbound approach starts at the offer-received hub.
What is life like after selling to Diversis Capital?
Diversis installs operating partners and strategic advisors alongside management, per its own deal announcements. Portfolio behavior shows an active M&A mandate: Fishbowl made two add-on acquisitions under Diversis ownership, and Kevin Ma cites organic revenue doubling and tripling at portfolio companies. Those accounts are firm-published and should be weighed as marketing.
Independent founder accounts of Diversis ownership are not yet public in any depth. Founders in diligence with Diversis should request references from the sellers of ArrowStream, Fishbowl, or Infotech directly.
Who else competes with Diversis Capital for software companies?
The lower middle market software segment is crowded with capable buyers. Serent Capital, Accel-KKR through its Emerging Buyout funds, and Marlin Equity Partners through its Heritage funds all target similar companies, while consolidators such as Valsoft and Volaris buy in the same size range with permanent-hold models. Vertical strategic acquirers frequently outbid all of them for a strong niche asset.
That buyer density is the founder’s pricing power. A Diversis offer is one bid from a field that routinely holds dozens of qualified bidders when a sale process actually reaches them.
What would a competitive process change?
A competitive process converts one Diversis bid into a market price. Windsor Drake calls the gap between what a serial acquirer pays in an unbanked bilateral negotiation and what the same business clears in a competitive process The Proprietary Discount, and Windsor Drake’s client work places that gap at 15 to 25 percent of enterprise value. The Windsor Drake Proprietary Discount Index will publish quarterly measurements of that gap.
A Windsor Drake process opens with a buyer universe of 150 to 300 potential acquirers, which includes every firm named on this page. Founders deciding whether an advisor is worth the fee should read Windsor Drake’s analysis on hiring a banker. Founders holding a live Diversis approach can engage Windsor Drake’s Approach Response to run a 4 to 6 month competitive process alongside the live offer.
Questions founders ask
How big is Diversis Capital?
Diversis manages more than $3 billion as of October 2025. Fund I closed at $255 million in 2019, Fund II closed at $675 million in 2021, and Fund III closed oversubscribed at its $1.2 billion hard cap in October 2025.
What does Diversis Capital pay for software companies?
Diversis does not disclose purchase prices, and no platform deal Windsor Drake reviewed carried published terms. The only public economics run the other way: PE Hub reported Diversis made roughly 10 times its money on ArrowStream in under four years. Founders should price a Diversis offer against competing bids, not against trust.
Does Diversis Capital buy minority stakes?
Diversis describes its strategy as operationally focused control investments, and its named platforms are control deals. Minority investing is not part of the firm’s stated model. A founder who wants to keep control is negotiating against the firm’s core strategy.
What size company fits Diversis Capital?
Diversis publishes no revenue or EBITDA bands. The firm targets the lower middle market, and its platforms such as Fishbowl, Decision Lens, and Infotech are established vertical software businesses with mature customer bases. Companies well below that maturity level are more likely to hear from consolidators such as Valsoft or Volaris.
Will Diversis Capital keep my management team?
Diversis states it partners with management and adds operating partners and strategic advisors around the existing team. Retention terms are negotiated deal by deal and are not published. Founders should treat post-close roles as deal points to settle before exclusivity, not after.
Should I respond to a Diversis Capital outreach email?
A response costs nothing, and disclosure does. Windsor Drake advises founders to learn the buyer’s thesis without sharing financials until an NDA and a structured process exist. One inbound approach is evidence of demand, and demand is an argument for competition rather than for a quick bilateral deal.
How long would a sale to Diversis Capital take?
A full competitive process runs roughly nine months, and Windsor Drake’s Approach Response runs 4 to 6 months alongside a live offer. Standard LOI exclusivity asks run 30 to 90 days, and roughly 1 in 3 signed LOIs fails to close on original terms across the market.
Last reviewed July 28, 2026 by Jeff Barrington, Founder and Managing Director, Windsor Drake. Content on this page may be cited with attribution and a link to https://windsordrake.com/acquirers/diversis-capital/