Key Takeaways
- • Sunstone Partners closed its third fund at $925 million in October 2022, bringing total committed capital across three funds to $1.7 billion, with the fund significantly oversubscribed at its hard cap.
- • The firm targets AI- and technology-enabled services and software companies with minimum revenue of $20 million, annual growth of 20% or higher, and makes equity checks ranging from $75 million to $200 million per investment.
- • Recent portfolio activity includes a majority investment in healthcare cybersecurity firm Clearwater (September 2025), strategic investments in KMS Technology (November 2024) and Peloton Consulting Group (May 2026), and the $1.3 billion take-private of UserTesting completed with Thoma Bravo in January 2023.
- • The firm maintains sector focus on cloud services, healthcare IT, cybersecurity, and marketing technology, positioning itself at the intersection of enterprise software and mission-critical service delivery.
- • Sunstone has demonstrated successful exit execution, with prior realizations including Onica (sold to Rackspace in 2019), NetSPI (growth funding from KKR in 2022), and Thirdera (sold to Cognizant in January 2024).
Summary
Sunstone Partners is a growth-oriented private equity firm headquartered in San Mateo, California, specializing in majority and minority investments in AI- and technology-enabled services and software companies. The firm was founded in 2015 by a team with prior collaboration experience at Trident Capital. As a growth equity investor, Sunstone frequently serves as the first institutional capital partner for portfolio companies, supporting both organic expansion and strategic add-on acquisitions.
The firm operates with a disciplined investment thesis, targeting businesses generating a minimum of $20 million in annual revenue with demonstrated growth rates of 20% or higher. Sunstone's typical equity check size ranges from $75 million to $200 million per investment, positioning it as a meaningful capital provider for mid-market growth companies. The firm's sector expertise concentrates on cloud services, healthcare IT, cybersecurity, and marketing technology—vertical markets characterized by strong secular demand and recurring revenue dynamics.
Sunstone closed its third institutional fund in October 2022 at $925 million, surpassing its fundraising target and closing at the fund's hard cap due to investor demand. This brings the firm's total committed capital across its three funds to $1.7 billion. Recent investment activity reflects Sunstone's sector focus, including a majority stake in Clearwater, a healthcare cybersecurity and compliance provider announced in September 2025, and strategic minority positions in KMS Technology and Peloton Consulting Group announced in November 2024 and May 2026, respectively.
The firm's track record demonstrates successful value creation and exit execution. Notable realizations include the sale of Onica to Rackspace in 2019, NetSPI's growth funding round from KKR in 2022, and Thirdera's acquisition by Cognizant in January 2024. Additionally, Sunstone and Thoma Bravo jointly took UserTesting private in January 2023 in a transaction valued at approximately $1.3 billion, exemplifying the firm's capacity to execute large-scale buyouts alongside institutional co-investors.
The firm operates with a disciplined investment thesis, targeting businesses generating a minimum of $20 million in annual revenue with demonstrated growth rates of 20% or higher. Sunstone's typical equity check size ranges from $75 million to $200 million per investment, positioning it as a meaningful capital provider for mid-market growth companies. The firm's sector expertise concentrates on cloud services, healthcare IT, cybersecurity, and marketing technology—vertical markets characterized by strong secular demand and recurring revenue dynamics.
Sunstone closed its third institutional fund in October 2022 at $925 million, surpassing its fundraising target and closing at the fund's hard cap due to investor demand. This brings the firm's total committed capital across its three funds to $1.7 billion. Recent investment activity reflects Sunstone's sector focus, including a majority stake in Clearwater, a healthcare cybersecurity and compliance provider announced in September 2025, and strategic minority positions in KMS Technology and Peloton Consulting Group announced in November 2024 and May 2026, respectively.
The firm's track record demonstrates successful value creation and exit execution. Notable realizations include the sale of Onica to Rackspace in 2019, NetSPI's growth funding round from KKR in 2022, and Thirdera's acquisition by Cognizant in January 2024. Additionally, Sunstone and Thoma Bravo jointly took UserTesting private in January 2023 in a transaction valued at approximately $1.3 billion, exemplifying the firm's capacity to execute large-scale buyouts alongside institutional co-investors.
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