Blackpeak Capital SaaS/ software market update – March 2025

Blackpeak Capital SaaS/ software market update – March 2025

Blackpeak are pleased to present our latest SaaS/ Software sector update report with market data through to 28 February 2025.

Despite the market volatility in recent weeks, the report highlights an improving trend in SaaS and Software sector transaction activity across both M&A and capital raisings. We believe 2025 is poised for a further improvement in SaaS and Software M&A and capital raising activity underpinned by:

• Improving SaaS and Software valuation multiples in 2024, despite a recent correction driven by global uncertainty, will provide a better backdrop for agreeing terms between buyers and sellers, facilitating M&A and capital raising activity
• Inflation and interest rates peaking in 2024 and expected to decline further in 2025, supporting better acquisition financing terms and valuations for SaaS growth companies
• Strong performance of the SaaS and Software sectors in the last 12 months with performance significantly exceeding the wider market, despite slowing average revenue growth rates since 2022
• Investors continue to place a premium on revenue growth and profitability, with a strong correlation between trading multiples and the Rule of 40
• Both strategic acquirers and private equity firms are expected to be very active, with strong interest in vertical SaaS companies with strong unit economics and growth
• Private equity and venture capital funds are facing growing pressure to deploy dry power and distribute capital, driving activity on both the buy and sell sides

SaaS Sector Update – March 2025_vSent