Lower Middle Market.
Built for What's Coming.
Recursiv is an AI-native investment platform focused on the lower middle market — businesses with $1M+ in EBITDA operating in fragmented, essential industries where intelligent automation creates outsized operational leverage.
The Search
Defining the Arena
We invest as an LP alongside best-in-class independent sponsors and LMM buyout groups, and selectively take majority or GP positions directly in businesses where our operating thesis is most differentiated.
Our focus: B2B and essential services businesses with recurring revenue characteristics, pricing power, and meaningful knowledge-work overhead that AI agents can systematically improve — expanding EBITDA margins without touching what makes the business defensible.
"The arbitrage is real, time-limited, and most visible in fragmented essential services."
The Framework
Structural Pillars of Value
Margin of Safety
Asset-light, process-heavy businesses where margins are expandable without proportional capex. High gross margins, recurring revenue, and scalable without proportional headcount.
Yield Protection
Physical delivery and relationship moats that AI cannot displace. Licensed operators, high switching costs, and essential non-discretionary services.
AI Leverage
Significant EBITDA step-change from installing an AI operating layer. Automatable back-office, primitive tech stacks, and high G&A overhead ripe for compression.
Exit Optionality
Fragmented markets with visible add-on pipelines, attractive entry multiples relative to stabilized value, and quality operators with sector expertise.
"Businesses too small to attract institutional attention, yet too operationally complex to have self-modernized."
The Transformation
AI-Native Operations
Every platform investment receives a shared AI agent stack — automating scheduling, dispatch, billing, compliance, and customer workflows so human capital focuses exclusively on high-value work.
We target businesses where AI amplifies but cannot replace the core — field service technicians, licensed specialists, and embedded client relationships that are inherently human.
The gap between incumbents and a well-resourced acquirer is wide. Consolidation opportunities abound in industries where the typical competitor is a founder-operated business without institutional infrastructure.
The Window
Time-Limited Arbitrage
Most lower middle market businesses are priced as if the next decade looks like the last. They are not yet reflecting the productivity step-change that AI-native operations will deliver.
Recursiv's mandate is to acquire and operate these businesses at pre-transformation multiples, install an intelligent operating layer, and hold through the rerating.
"The best businesses of the next decade will be acquired, transformed and compounded - by operators who understood what was coming before the market did."
Recursiv Capital Partners