At Andreessen Horowitz, we’ve long believed in the power of software to reshape industries. As my partner, Marc Andreessen, famously put it, “Software is eating the world,” and we continue to see traditional industries ripe for transformation. As we enter the era of AI, we believe cutting-edge technology has even greater potential to both accelerate top-line growth and improve bottom-line efficiency in otherwise conventionally service-based industries. E3Tech, led by Rudy Adolf, was founded to do just that.
Rudy is a proven entrepreneur: as Founder and CEO, he built Focus Financial from merely an idea conceived at his kitchen table in 2004 to one of the most successful investment advisers globally. The business went public in 2018 and was sold in a $7.3B transaction in 2023. In building Focus Financial through a programmatic global M&A strategy, the team assembled close to 300 financial advisory groups and was successful in applying a combination of operational excellence and sophisticated technology systems. At exit, the group managed about $400B with over 5,000 employees operating in seven markets.
As AI begins to eat the world, we believe that the opportunity to execute a “Focus Financial 2.0” strategy is even greater. Not only does AI broaden the scope of addressable services-based businesses, but AI can also drive even greater opportunities for transformation by impacting operations otherwise wholly reliant on labor versus technology. Many professional services industries are ripe for AI to augment routine labor processes. Fields such as marketing, accounting, and building design are full of formulaic exercises that would immensely benefit from AI’s ability to perform complex quantitative analysis, streamline workflows, and deliver substantial time and cost savings. As a result, E3 was established as a holding company, which allows them to systematically apply their strategy across multiple industries. The common characteristics of the verticals that E3 may enter will be industries that have a long tail of smaller businesses that have not utilized technology effectively to drive improved economics.
Beyond strategy and execution, we’re deeply aligned with E3’s ethos: “We never turn pilots into passengers”—i.e., entrepreneurial drive and autonomy are key to unlocking long-term business value, and founder-led businesses are well positioned to succeed. E3 embodies this principle by enabling acquired businesses to maintain current leadership and thrive under an economic model that enhances entrepreneurial ambition.
The first example of this strategy is E3’s acquisition of Sylvan Inc. Sylvan is a multi-trade construction company specializing in large-scale, complex projects across industries like data centers, energy, automotive, higher education, and beyond. They have an exceptional management team who has grown the company very well by supporting highly sophisticated customers on mission-critical projects. E3 believes technology like BIM, AI, VR, AR, drones, and wearables are changing every aspect of this industry and creates excellent opportunities for growth. By joining forces with E3Tech, Sylvan will gain access to cutting-edge tech innovations, coupled with E3’s programmatic acquisition strategy, to broaden service offerings and geographic presence.
We are thrilled to lead the investment in E3Tech and support Rudy and his team on their journey to leverage AI and operational excellence to reshape legacy industries.
