M&A Market Dynamics – Software & Technology
- After a strong uptick last quarter, broader technology sector total deal value fell 23% compared to Q3 2023 and finished closer to the prior four quarters’ average, with $78B in transaction value. The decline stems from software specifically, with software total deal value dropping 66% while other technology sectors increased nearly 60%.
- Relative to Q3 2023, Q4 2023 software deal volume declined 23%, with 491 transactions in the quarter. This represents the lowest quarter for software deal volume since Q2 2020, when transaction activity was significantly disrupted by COVID-19. Despite the decrease, activity remains higher than pre-pandemic levels.
- Though 2023 was a challenging year that continued the fallout from the second half of 2022, many within the M&A community expect a meaningful improvement in 2024. According to a survey by 451 Research, over 80% of respondents anticipate an increase in tech M&A activity in 2024. The forecast on tech valuations is more mixed, with half of respondents expecting an increase and the rest split between holding even or further declining. Survey sentiment is largely optimistic as acquirers are less concerned about the impact of inflation on acquisitions and more positive about growth.
Read Software & Technology M&A Pulse Q4 2023 Full Report
Software & Technology M&A Pulse – Q2 2024
Transaction volume and total value both dropped noticeably in Q2 2024 compared to the previous quarter for the software & technology sector. Continued economic and political uncertainty kept many investors on the sidelines as they opportunistically sought deals.
Software & Technology M&A Pulse – Q1 2024
Transaction volume and total value increased significantly in Q1 2024 compared to the previous quarter for the software & technology sector.
Software & Technology M&A Pulse – Q3 2023
The broader technology sector demonstrated a strong uptick in deal value in the third quarter of 2023 compared to the previous quarter, increasing more than 70 percent, with software specifically outpacing that growth with total deal value increasing more than 130 percent to $99B.
Software & Technology M&A Pulse – Q2 2023
Despite the broader technology sector showing an uptick in both deal value and deal volume in the second quarter of 2023 compared to the previous quarter, software specifically saw a modest decrease in value while volume remained largely flat, with 629 transactions in the quarter combining for $27.7B in value.
Software & Technology M&A Pulse – Q1 2023
The first quarter of 2023 saw a continued decline in deal value while deal volume increased in the software sector compared to the previous quarter, with 704 transactions in the quarter combining for $34.2B in value.