SaaS M&A Activity Lower Middle Market
SaaS M&A by Year – Lower Middle Market (In Billions of USD)
Lower middle market SaaS company M&A demonstrated resilience in 2024, achieving a deal volume of $8.9 billion despite a challenging macroeconomic environment. This represents a 29% year-over-year increase compared to 2023. This robust activity was driven by strategic imperatives, competitive pressures, and the ongoing pursuit of innovation within the sector. Key trends: • Strategic Buyer Dominance: Software and technology companies are strategically utilizing M&A to gain a competitive edge in the rapidly evolving digital landscape. By acquiring complementary technologies and expanding into new markets, these companies are enhancing their capabilities and solidifying their positions within the industry. • Operational Efficiency: Companies are actively seeking to acquire businesses with advanced AI capabilities to enhance their own operational efficiency, improve customer experiences, and gain a competitive edge. • AI-Powered Innovation: Companies are acquiring businesses with strong AI/ML capabilities to accelerate their own innovation efforts, improve their data-driven decision-making, and unlock new avenues for growth. The rebound in SaaS M&A activity is expected to continue upward growth in 2025. Companies are actively looking to enhance their product offerings and gain a competitive edge by pursuing innovation-driven acquisitions with recurring revenues. The shift towards cloud-based, modern technologies empowers buyers to capitalize on growth opportunities and solidify their positions in the evolving digital landscape. Source: Pitchbook as of 31 December 2024. Data consists of transactions where deal value was disclosed. Note: Companies valued below $150 million were considered lower middle market.
495
303
275
Strategic Buyers
234
220
66%
$9.7
$16.6
$10.2
$6.9
$8.9
2020
2021
2022
2023
2024
SaaS M&A Volume by Quarter – Lower Middle Market (In Billions of USD)
Total Deal Size in ($M) # of Deals
135
120 122
106
88
82 88
75
68
66 64 59 67 63
55 55
52 48 51
42
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2020 2021 2022 2023 2024
13
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