Software valuations influence markets and shape every exit decision. Over the past decade, valuation multiples have shifted sharply as investor priorities moved from growth at all costs to efficient, profitable expansion. In this article, we look at how software valuation multiples changed worldwide from 2015 to 2025 and why they matter to founders, executives, and investors.
Publicly traded software companies report valuation multiples every day, but the link to private deals is not always straightforward. Understanding that connection helps with both market read and exit timing. Public pricing now rewards cash flow, sustainable margins, and efficient growth; trends such as AI adoption, vertical SaaS, and usage-based pricing also shape investor expectations.
Private software firms differ meaningfully from their listed peers. Many are smaller, more focused on profitability, and operate outside major U.S. exchanges. To provide a more relevant view, we analyzed hundreds of private software M&A transactions completed between 2015 and September 2025. We examine how multiples vary by deal size, geography, business model, and growth profile to give practical benchmarks for funding and exits.
Table of Contents
- Global Trends in Software Valuation
- Software Valuation Multiples
- What Drives Valuation Differences
- Market Outlook for Software Valuations
- About Aventis Advisors
Global Trends in Software Valuation
Understanding how software valuation multiples have evolved globally over the past decade provides essential context for today’s M&A market. After a long period of expansion fueled by low interest rates and high growth expectations, multiples reached record levels in 2021 before normalizing in the following years. To assess these changes accurately, we focused our research on private-market transactions rather than public-company benchmarks.
Private Markets Research Methodology
For this research, we reviewed a proprietary database of more than 45,000 software-company transactions completed worldwide. From this dataset, we identified 1,325 transactions with disclosed valuation multiples, including EV/Revenue and EV/EBITDA. Within this subset, 622 transactions reported EV/EBITDA multiples, allowing us to benchmark both growth-oriented and mature software companies.
Because valuation multiples are disclosed for only a fraction of private-market deals, the sample is not fully comprehensive. Even so, thousands of transactions across geographies, company sizes, and business models provide meaningful insight into how software companies are valued and what drives those differences.
Our review covered transactions from 2015 through September 2025 and examined how multiples vary by:
- Deal size – how larger transactions typically command premium valuations
- Geography – how U.S.-based SaaS companies and European peers differ in pricing
- Business model and growth profile – how recurring revenue models and strong cash flow affect EV/Revenue and EV/EBITDA multiples
The dataset included both on-premise and SaaS companies, reflecting the ongoing shift of many traditional software vendors toward subscription and cloud-based models.
This foundation allows us to explore how valuation multiples have evolved over time and what patterns have emerged across market segments.
Software Valuation Multiples
Over the past ten years, software companies have historically attracted premium valuation multiples relative to many other sectors, reflecting strong investor appetite for scalable, high-margin business models.
Across 1,325 transactions with disclosed EV/Revenue multiples, the median revenue stood at 3.7x, with the top quartile reaching 7.2x and the bottom quartile at 2.0x. This highlights how key factors such as growth rate, customer base quality, and recurring revenue influence outcomes.
622 transactions reported EV/EBITDA multiples for profitability-focused metrics, showing a median of 19.0x EBITDA. More profitable or strategically positioned companies reached 34.6x EBITDA or higher, while slower-growth or concentrated businesses traded around 11.1x.
These figures show how company performance and risk profile affect valuation. Businesses with strong revenue growth, diversified customers, and predictable earnings typically fall in the upper quartile, while smaller or lower‑growth companies trade closer to the lower quartile.
Median EV/Revenue multiples for software companies
Revenue multiples are widely used when valuing software companies, especially those investing heavily in growth while generating limited or no profit.
From 2015 to 2017, software EV/Revenue multiples were relatively modest, mostly in the 2–4x range, reflecting steady but conservative market conditions.
In 2018–2019, multiples gradually expanded, reaching around 4–5x as investor appetite for scalable SaaS business models increased and cloud adoption accelerated.
A sharp expansion occurred between 2021 and early 2022, with the median multiple peaking at 6.7x, driven by abundant liquidity, ultra-low interest rates, and an investor focus on growth over near-term profitability.
By 2023, sentiment shifted abruptly as interest rates rose and risk appetite declined, triggering a sharp correction with multiples falling to just above 3x.
Throughout 2023 and 2024, EV/Revenue multiples stabilized at these lower levels, typically around 2.6x. In H2 2025, the median ticked up to 3.1x, suggesting early signs of a normalization in valuation expectations and a more balanced approach to growth and profitability.
Median EV/EBITDA multiples for software companies
EBITDA multiples are commonly used to value mature software companies with stable cash flow, slower growth, or niche operations.
From 622 transactions with disclosed EV/EBITDA multiples, the median for the past ten years is 19.0x. From 2015 to 2019, software company EV/EBITDA multiples remained relatively steady, fluctuating mostly between 15x and 20x, indicating a stable and balanced valuation environment.
In 2020, valuations dipped slightly to 14.6x, reflecting uncertainty at the onset of the pandemic.
This was followed by a strong surge in 2021, when the median multiple climbed to 26.1x in H2, driven by abundant capital, ultra-low interest rates, and aggressive growth-focused investment.
The momentum peaked in H2 2022 at 39.9x, marking the highest valuation levels of the decade, before a rapid correction began later that year as rising interest rates and tightening capital markets shifted investor focus toward profitability.
Through 2023 and 2024, EV/EBITDA multiples remained anchored in the 17–22x range, reflecting a post-correction focus on profitability and earnings quality. In H2 2025, the median increased to 26.1x, broadly consistent with the modest expansion observed in EV/Revenue multiples. While this may reflect improving operating leverage and earnings visibility rather than broad multiple expansion, the data suggests a gradual normalization rather than a full valuation re-rating.
What Drives Valuation Differences
SaaS vs. On-Premise Software Multiples
In recent years, much of the discussion around software valuations has focused on Software-as-a-Service (SaaS) companies. In our analysis, we did not separate SaaS and on-premise vendors because the distinction has largely blurred.
Many traditional vendors now offer cloud-enabled or hybrid delivery and rely on subscription-based revenue. At the same time, investors have shifted focus from pure growth to efficiency and sustainable cash flow, meaning even SaaS businesses must demonstrate profitability to command premium valuations.
In practice, SaaS companies still trade at slightly higher revenue multiples, largely due to lower technical debt and stronger long-term growth prospects. However, this spread has narrowed significantly compared with the high-growth years before 2022.
SaaS valuation multiples: 2015-2025
Valuation Trends (2015-2025)
Software valuation multiples have shifted materially over the past decade, reflecting evolving investor priorities and market conditions. From 2015 to 2019, multiples remained relatively stable, typically ranging from 2–4x EV/Revenue and 15–20x EV/EBITDA. Valuations began to expand in 2018–2019 as confidence in recurring-revenue and scalable SaaS business models increased.
Valuations peaked in 2021, with EV/Revenue reaching 6.7x and EV/EBITDA expanding to 26–40x, driven by record-low interest rates, abundant liquidity, and intense competition for high-growth software assets.
As interest rates rose and liquidity tightened in late 2022, sentiment shifted sharply. Multiples compressed to below 3x EV/Revenue and 15–18x EV/EBITDA, marking a renewed emphasis on profitability and cash-flow generation. Throughout 2023 and 2024, valuations stabilized at these lower levels, reflecting a more disciplined and fundamentals-driven market environment.
By the end of 2025, valuation metrics showed early signs of normalization rather than a full re-rating. EV/Revenue multiples increased modestly to around 3.1x, while EV/EBITDA rose into the mid-20x range, suggesting improving earnings quality and operating leverage. Overall, software valuations remain well below their 2021 peaks, with investor focus firmly centered on sustainable growth and profitability.
Company Size and Scale
Company size remains one of the strongest predictors of valuation outcomes in software M&A. Our dataset shows a clear size premium in software M&A. Larger deals consistently achieve higher valuation multiples on both EV/Revenue and EV/EBITDA.
- Small transactions (<$5M) trade at 2.1x EV/Revenue and 17.2x EV/EBITDA, reflecting higher perceived risk, limited scalability, and founder dependency.
- Mid-sized deals ($50–100M) reach 3.7x EV/Revenue and 17.4x EV/EBITDA, supported by more institutionalized operations and stronger growth visibility.
- Large transactions ($100–500M) average 5.3x EV/Revenue and 19.2x EV/EBITDA, benefiting from established market positions and recurring revenue models.
- Top-tier deals ($500M+) achieve 6.7x EV/Revenue and 26.9x EV/EBITDA, driven by global reach, buyer competition, and proven scalability.
Across all 1,325 deals, the median stands at 3.7x EV/Revenue and 19.0x EV/EBITDA, though this masks wide variation by company size. The data underscores how scale drives valuation premiums.
Why Larger Companies Trade Higher
Bigger software companies carry less perceived risk, enjoy more diversified customer bases, and have experienced management teams. Their cash flows are more predictable, which supports higher EBITDA multiples. They also attract more investor competition, as many private equity funds and strategic buyers focus on larger, proven businesses.
Cross-regional Valuation Differences
Geography continues to play a major role in software company valuations. Firms in larger, more mature markets generally achieve higher multiples, supported by stronger growth prospects, larger addressable markets, and more competitive buyer dynamics.
United States companies lead both in revenue and earnings multiples, with medians of 5.0x EV/Revenue and 25.0x EV/EBITDA. This premium reflects the size and global scalability of the U.S. market as well as larger deal sizes. The median U.S. transaction of $276 million is well above the global median of $55 million, which contributes to higher overall valuations.
Among other developed markets, Australia and Norway stand out with elevated EV/Revenue multiples of 4.1x and 4.7x, driven by active local SaaS ecosystems and strong buyer demand. The United Kingdom (3.3x) and Sweden (3.0x) fall in the mid-range, supported by steady but more measured pricing.
France (2.8x) and Canada (2.5x) show more conservative valuations, reflecting smaller market sizes and less intense competition among acquirers.
Across all geographies, developed markets tend to achieve premium multiples, but the extent of that premium depends on growth expectations, capital availability, and local buyer activity.
Market Outlook for Software Valuations
Short-Term (2026) Expectations
Software valuation multiples are expected to remain largely stable through 2026, with limited signs of broad-based recovery. Buyers continue to favor efficiency, cash flow visibility, and disciplined growth, while pure revenue expansion is no longer enough to justify premium pricing. Many acquirers, particularly private equity firms, have ample capital but are deploying it cautiously, focusing on assets that demonstrate both resilience and scalability. This selectivity keeps average multiples flat even as high-quality assets attract competitive bidding.
Macroeconomic conditions remain a mixed picture for dealmaking. While inflation pressures have eased, interest rates remain relatively high by historical standards, keeping financing costs elevated and tempering aggressive valuations. Public market comparables have improved modestly, but the link between public and private valuations remains weaker than in prior cycles, as buyers emphasize profitability and working-capital efficiency over momentum-driven growth stories.
Within the private market, the valuation gap between top-tier and mid-market software companies is expected to widen further. Profitable, recurring-revenue businesses operating in essential segments, such as cybersecurity, infrastructure software, and AI-enabling tools, are likely to see mild multiple expansion. In contrast, smaller or less differentiated vendors may face stagnant or even declining multiples as investors prioritize risk-adjusted returns. Overall, 2026 is likely to be a year of consolidation and cautious optimism rather than broad valuation recovery.
Long-Term Software M&A Outlook
Over the long term, software M&A will remain a core element of both strategic and private equity investment strategies. The sector’s recurring-revenue models, scalability, and essential role in business operations continue to make it resilient through economic cycles and attractive across market conditions.
While the valuation peaks of 2021 are unlikely to return, a gradual normalization of multiples is expected as software adoption deepens across industries and digital transformation initiatives accelerate. Investors are placing greater emphasis on operational efficiency, margin visibility, and customer retention; traits that support durable, cash-generating business models over purely growth-led ones.
Private equity investors are poised to expand their presence through disciplined buy-and-build strategies, consolidating niche verticals to create scale and synergy. Strategic acquirers, meanwhile, will target software assets that enhance innovation or extend product ecosystems, particularly in areas such as AI enablement, cybersecurity, and industry-specific SaaS.
Despite cyclical fluctuations, software’s role as a critical enabler of productivity, automation, and innovation will continue to underpin steady M&A activity. Structural demand, recurring revenue visibility, and investor familiarity with the business model should sustain healthy long-term interest in the sector.
About Aventis Advisors
Monitoring software company valuations and transaction activity provides valuable insight into market trends and exit timing. Every company is unique, just like every founder’s journey. That is why specialized guidance matters, particularly from advisors who understand the software market in depth.
Software M&A specialists help founders navigate valuation dynamics, manage complex deal processes, and negotiate effectively while maintaining focus on day-to-day operations. The right partner can make a measurable difference in both deal certainty and value realization.
Aventis Advisors is an independent M&A advisory firm focused on technology and growth companies. We combine sector expertise with rigorous data analysis to help founders, investors, and boards make informed decisions.
To explore your company’s valuation and understand the transaction process in more detail, get in touch with our team.
