M&A in the Software Industry: Over 90k deals between 2013 and 2026

In today’s digitally driven world, software is pivotal in shaping businesses, transforming industries, and revolutionizing our lives and work. The software industry has experienced exponential growth, driven by innovation, emerging technologies, and evolving consumer demands. Within this dynamic landscape, mergers and acquisitions (M&A) have emerged as a strategic avenue for companies to strengthen their market position, expand their offerings, and capitalize on the vast potential of the software sector.

This blog post investigates why software players engage in M&A activities. We then explore the software industry’s M&A landscape, offering an in-depth analysis of trends in deal volumes, geographical distribution, valuation multiples, and other essential factors.

Why do software firms engage in M&A

Depending on the buyer, software firms can be acquired for various reasons. The common transactional rationale for acquiring a target company in this industry includes the following:

• Acquire technology, products, and engineering talent to augment capabilities and realize operational synergies once completing post-merger integration.
• Consolidate market position, expand into new markets, and increase customer base by acquiring companies with complementary products.
• Offer a broader range of products and services by acquiring companies in adjacent spaces and obtaining direct access to valuable IP, patented technologies, and copyrights.
• Continue growing rapidly through acquisition rather than just organic growth.

M&A in Software: Overview of the M&A landscape

We analyzed over 90,000 global software mergers and acquisitions deals from 2013 through August 2026 to comprehensively understand M&A activity in the industry. Our analysis spans multiple areas, including regional deal volume changes, level of financial vs. strategic acquisitions, median valuation multiples, and more.

Total deal volumes

Deal volumes are back at record levels while valuations sit well below the last cycle, and ongoing innovation in areas like cloud computing, data infrastructure, and artificial intelligence suggests the sector will keep evolving quickly. As new technologies emerge and enable transformative business models, dealmaking will likely remain vibrant over the long term across the software industry.

M&A transactions in the software market grew at an 11.6% CAGR from 2013 to 2025, with annual deal volumes rising almost four-fold from 2,719 to a record 10,177. Key growth drivers included accelerating digital transformation, favorable market conditions with abundant capital, increasing financial investor interest, and a general rise in the number of software products, particularly SaaS, hence potential targets.

The industry was not immune to the slowdown that followed. Facing rising rates, inflation, war in Ukraine, and chip shortages, growth stalled in 2022 at 9,944 deals, and volumes then fell 14.9% to 8,459 in 2023 amid widespread tech layoffs. The recovery was quick. Volumes rebounded to 9,910 deals in 2024 and set a new record of 10,177 in 2025. Through August 2026 the market has recorded 5,823 deals, running slightly below the 2025 pace, although the most recent months typically fill in as transactions are reported.

M&A activity by country

Unsurprisingly, the United States recorded the most software mergers and acquisitions between 2013 and August 2026, given its dominance as a tech hub and home to major financial investors like venture capital and private equity firms. Total US deal flows reached 36,349, growing steadily year after year until peaking at 3,789 in 2021, with 2025 close behind at 3,625.

As the largest European economies, the UK, Germany, and France also performed remarkably well, collectively accounting for 51.0% of European software acquisitions. The Nordic countries of Sweden, Finland, Denmark, and Norway saw substantial M&A interest, too, with 5,053 deals in total. Europe has steadily closed the gap on North America over the period, and in 2024 it recorded more software deals than North America for the first time, 3,664 against 3,506.

Elsewhere, Japan, China, India, and Israel also stood out for deal volumes, benefiting from cutting-edge technologies and abundant talent pools. Japan is now the largest Asian market in our data with 5,787 deals, ahead of China at 4,083 and India at 2,524.

Financial vs. strategic buyers

Acquisitions led by financial buyers like venture capital and private equity firms have risen steadily since 2015, and have accounted for more than half of all software deals in every year since 2020. Their share peaked at 55.0% in 2022 and has eased back to 50.1% through August 2026. Financial investors have cultivated a strong appetite for acquiring tech and software companies for several key reasons, including:

• High growth potential: software firms can scale rapidly as products are easily reproducible digitally.
• Capital efficient: software companies require relatively low capital expenditure compared to other industries, giving better cash flow and returns on capital.
• Recurring revenues: targets with a software-as-a-service operational model provide predictable, recurring revenues leading to more stable cash flows.
• Ability to bundle and upsell: additional products and features can be bundled and upsold to the existing customer base, enabling growth from existing relationships.
• Potential to disrupt industries: some companies may have the potential to disrupt traditional industries, thus enabling exponential growth opportunities.

Given North America’s position as a leading hub for technology and private capital, it is unsurprising this region saw the highest level of financial acquisitions of software companies. Financial deals there peaked at 62.0% in 2022 and have eased every year since, to 51.8% through August 2026. Europe has run consistently lower, at 45.8% so far in 2026, while the rest of the world sits in between at 52.8%.

Cross-border activity

Cross-border mergers and acquisitions accounted for around 32% of global software deals from 2013 to 2020, before activity surged to a peak of 36.7% in 2021. Easy access to capital during this period enabled acquirers to pursue cross-border targets more aggressively. As market conditions soured, cross-border appetite fell back to 32.9% in 2023, and it has since settled into a narrow band between 33% and 35% across 2024, 2025 and the first eight months of 2026, marginally above pre-pandemic norms.

Interestingly, strategic acquirers have historically been more open to pursuing cross-border deals than financial buyers. From 2013 to 2020, cross-border transactions accounted for approximately 34% of strategic acquisitions globally, while financial buyers stayed around 29%. Favorable market conditions in 2021 and 2022 temporarily boosted international risk appetite among both groups, and the gap has narrowed since as financial buyers have grown more international. Through August 2026 the two sit at 35.1% and 31.2% respectively.

Most active buyers

The most active software company acquirers globally represent a mix of strategic players and financial buyers, though U.S.-based entities dominate the top ranks. Insight Partners, a leading venture capital and private equity firm took the top spot with 219 deals over the period analyzed. Norway’s Visma, a software consolidator, came in second with 171 deals. Microsoft followed closely behind with 152 acquisitions aimed at expanding its technology stack. 

Regarding median deal value, private equity firms Thoma Bravo and Vista Equity Partners recorded the highest figures. Thoma Bravo’s largest software acquisition is the EUR 10.8 billion take-private of Dayforce in 2025, ahead of Anaplan at EUR 9.3 billion in 2022. Fellow private equity firm Vista Equity Partners, known for aggregating vertical market software companies, took Citrix private in 2022 for EUR 14.9 billion alongside Elliott’s Evergreen Coast Capital, and bought tax automation provider Avalara the same year for EUR 8.6 billion, its largest software deal on its own.

M&A in Software: Overview of M&A financials

Median deal value

From 2013 to 2020, the median value for software deals held steady at around EUR 14 million. This changed during the pandemic years of 2021 and 2022, when easy financing conditions and bullish sentiment pushed the median to EUR 26.6 million. It then fell back to EUR 10.9 million in 2023, the lowest reading of the whole period, before climbing again to EUR 17.1 million in 2024, EUR 21.1 million in 2025 and EUR 25.2 million through August 2026, within touching distance of the 2021 peak.

Strategic acquirers executed larger median deal sizes than financial buyers through most of the first decade of the period, with the widest gaps in 2013 and 2014 and again in 2020 and 2023. That pattern has since reversed. Financial buyers have posted the higher median in every year since 2021 except 2023, and through August 2026 they sit at EUR 25.5 million against EUR 22.2 million for strategic acquirers. The differences potentially reflect strategic buyers‘ willingness to pay higher valuations for deals that can result in significant cost savings or sales growth synergy opportunities.

Median valuation multiples

Both the revenue and EBITDA multiples used in software M&A transactions were relatively stable through the first half of the period. The revenue multiple hovered around 3.0x, while the EBITDA multiple climbed from about 11.5x in 2013 into a 15x to 17x range from 2015 onwards, until the blockbuster year of 2021, when valuations spiked amid frenzied deal activity and buoyant risk appetite, reaching 4.0x revenue and, a year later, 19.3x EBITDA. Multiples then fell sharply. EBITDA multiples have since recovered to 14.1x through August 2026, close to their pre-pandemic level, but revenue multiples have not followed. At 1.9x they remain roughly a third below where they sat before the pandemic, which is the clearest sign that buyers are no longer paying up for growth alone.

2026 Software M&A Outlook

Deal volumes have fully recovered from the 2023 slump. Activity set records in 2024 and 2025, and the first eight months of 2026 have run only slightly below that pace. Valuations have not followed volumes. Revenue multiples remain about a third below their pre-pandemic level, and buyers continue to underwrite software assets on demonstrated profitability rather than growth alone. The result is a busy market at more sober prices, in which the quality of revenue decides which assets clear and which do not. Stock is also a harder currency than it was during the last cycle, so cash consideration and structured earn-outs carry more of the load.

Simultaneously, private equity investors remain the engine of this market. Financial buyers have accounted for more than half of all software deals in every year since 2020, and take-privates have continued at scale, from Citrix and Anaplan in 2022 through to Dayforce in 2025. We anticipate the continuation of private equity dealmaking, albeit with intensified scrutiny of business models and profitability. With the IPO exit route still narrow for most software companies, sponsors have leaned harder on sales to other sponsors and on bolt-ons to existing platforms, which is where much of the deal count now sits.

Artificial intelligence runs through all of this. It is reshaping what buyers are willing to underwrite, because the first question on any software asset now is how much of its advantage survives contact with capable models. Proprietary data, deep workflow integration and genuine switching costs still defend a valuation. A feature set that a competent team could rebuild on top of a foundation model does not. AI is also absorbing an unusual share of the capital available to the sector, most of it concentrated at the model and infrastructure layer, and that capital competes with conventional software M&A for both money and attention. For owners, the practical consequence is a market that is busy but selective, where an AI story attached to a business gets tested rather than taken at face value.

Long-term Software industry M&A outlook

As one technological phase comes to an end, a new one begins. This upcoming cycle will have its own unique story, popular terms, and successful players. The driver of this change is the rapid progress of Artificial Intelligence. A new generation of companies is being built on these technologies, and for now the capital chasing them is being drawn away from the rest of the software market. The question for the next few years is how far that capital travels down the stack, from the model builders into the application and services layer where most software companies actually operate.

Although it might take quite a while to reach the highest valuations seen in 2021, there will always be a strong interest in new technologies. As a result, the software sector will continue to be one of the most highly regarded and valued areas.

Why You Need a Software M&A Advisor

Monitoring software valuations and M&A activity provides valuable insights into market trends and helps you time your exit strategy effectively. However, every company and founder’s journey is unique, which is why it’s crucial to seek expert guidance from M&A professionals, particularly those specializing in software.

Software M&A advisors have the expertise to navigate market dynamics, assess valuations, and manage all necessary workstreams. While you focus on running your business, they ensure every detail is handled meticulously and work to secure the best possible deal. Their success is tied to yours, and their impact on the final sale price can be significant.

About Aventis Advisors

Aventis Advisors is an M&A advisor for software companies. We believe the world would be better off with fewer (but better quality) M&A deals done at the right moment for the company and its owners. Our goal is to provide honest, insight-driven advice, clearly laying out all the options for our clients – including the one to keep the status quo.

Get in touch with us if you are interested in talking to our M&A advisors about software deal opportunities.