Hi there —

Today we have a treat… the The SaaS M&A Report for 2025…

This is our big annual breakdown of the entire SaaS M&A market, after evaluating all 3,163 private software deals and 61 public software deals from 2024.

If you’re considering selling your software firm in the next 24 months, take five minutes and read it below. It’s worth your time.

If you’re not yet a SaasRise member, apply to join us here for more killer, fresh, and data-driven content like this — and for help connecting to the right investment banks based on your size and vertical when you’re ready.

Now, let’s jump right in to the report! You can read it below in the email or open it as a Google Doc here.

The SaaS M&A Report 2025
By Ryan Allis and Salman Hatta

Over the past two weeks, we analyzed all 3,183 private software and 61 public M&A transactions that occurred in 2024 to create the SaaS M&A Report for 2025.

Salman is a former investment banker and Wharton MBA and I’ve spent my career building and coaching SaaS companies and have a Harvard MBA. So we actually had a great time crunching the numbers for you in this 23 page report.

We cover SaaS M&A revenue multiples, EBITDA multiples, public vs. private multiples, multiples by geography and sector, the impact of The Rule of 40 and NRR on multiples, and the top SaaS investment banks based on deal volume.

We used source data from Pitchbook, Merger Market, Software Equity Group, Aventis Advisors, and Bessemer Venture Partners to come up with this report. Each table and graph cites its source.

Enjoy and feel free to forward this report off to your investors, board, or advisors!

Here are links to all the Google Sheets mentioned in this report.

• Summary Stats - All 2024 Software M&A Deals

• All Software M&A Deals in 2024

  • Private M&A Deals in 2024

  • Public M&A Deals in 2024

• Software M&A Deals by Year

• Top Software Acquirers of 2024

• Top Software Investment Banks of 2024

• Top Software Investment Banks - Under $100M Deals

Below is what we discovered… 

2025 On Pace to Set a Record for Deal Volume

SaaS M&A activity in 2024 was higher than 2023 in deal count, making it the second-best year for software M&A. Deal volume remained strong, and overall market conditions and multiples improved, reflecting continued investor confidence in SaaS business models. We expect this momentum to continue and expand into 2025.

Here’s the SaaS M&A Deal chart, using data from our friends at Software Equity Group, including both public and private SaaS deals. Their forecast for 2025 is based on the deal volume in Q3 and Q4 2024 accelerating.

Takeaways from All Private Software M&A Transactions in 2024

In 2024, according to Pitchbook there were 3,183 private software M&A transactions, including both traditional software and SaaS deals. 

• The average M&A Revenue Multiple for all types of software firms (including legacy software + SaaS firms) was 6.4x, though the median revenue multiple (more representative of a normal deal) was 2.6x
  

• The average EBITDA multiple for all types of software firms (including legacy software + SaaS firms) was 16.3x, while the median was 10.2x
  

• Among software firms that raised venture capital, the average capital raised before acquisition was $27.9M, while the median (more representative of a normal company) was $5.0M.
  

• Among software firms where revenue data was available, the average revenue at sale was $101.7M while the median (more representative of a normal deal) was $5.9M.

The SaaS Valuation Premium Over Legacy Software Companies

Again this year, we saw a major premium in valuing SaaS companies over non-SaaS legacy software (on-premise, downloadable, etc.) companies. 

SaaS firms had a Median Revenue Multiple of 4.1x, representing a 57% premium over the 2.6x for all software deals. 

In terms of EBITDA, SaaS firms had a 19.2x multiple, representing an 88% premium over 10.2x for all software deals.

The chart below compares the median revenue and EBITDA multiples for the 3,183 software M&A deals (including SaaS plus traditional software) compared to the 2,107 SaaS-only deals.

Revenue Multiples Increased As 2024 Went On

Using data from Software Equity Group, if we break down the SaaS M&A revenue multiples by quarter, we see a significant strengthening as the year went on, ending the year with a very strong 4.1x median revenue multiple and 6.0 mean.

The median revenue multiple increased 7.8% year over year from Q3 2023 while the mean revenue multiple increased 24.4% year-over-year due to a few higher priced outliers coming back into the market.

Revenue & EBITDA Multiples Over the Last 10 Years

Over a 10-year historical period, we see similar stats. Our friends at Aventis Advisors analyzed 459 SaaS deals from 2015 to 2025 with disclosed revenue multiples and found the median ten year revenue multiple to be 4.7x and the median 10 year EBITDA multiple to be 22.1x.

The median EBITDA multiple came back to Earth in 2024. However, this is probably due more to data availability than any other factor (most private SaaS deals don’t report on EBITDA), so take all private EBITDA multiples with a grain of salt due to low sample sizes. 

Among public SaaS companies the average EBITDA multiple in 2024 was 38.6x, a significant public premium over private SaaS firms, as we show below.

SaaS Public Revenue Multiples Remain Strong

The median revenue multiple for private SaaS firms in 2024 was 4.1x while the median revenue multiples for public SaaS firms was 5.6x, a 36% public premium.

There was an even bigger EBITDA premium for public companies in 2024 – with the median public SaaS firm trading at 38.2x EBITDA compared to 19.2x for private SaaS firm exits, a 99% premium.

And if we look at the data as of today (February 10, 2025, public SaaS multiples have come up even further, indicating continuing strengthening of SaaS markets).

According to Bessemer Venture Partners Cloud Index, the current median revenue multiple of a publicly traded SaaS company is 7.5x, up 25% from 6.0x a year ago, and 83% higher than private company multiples. Per Aventis Advisors, the median public SaaS company trades at 7.4x TTM revenue as of January 2025.

This public premium makes sense because private companies often carry higher risk, lower liquidity, and less market visibility, leading investors to apply a discount compared to their public counterparts. 

Additionally, public SaaS firms typically have more established revenue streams, stronger operational efficiencies, and broader investor access, which can justify their higher multiples. The average publicly traded firm in the BVP Cloud Index is growing at 14.5% annually.

We see similar data in the SEG SaaS Index, which is showing an average public company SaaS revenue multiple of 6.3x.

Because of the compelling business model of SaaS (recurring revenue annuity streams), SaaS firms command a higher revenue multiple than most industries.

Considering that a venture-backable SaaS company is likely growing revenues at between 50%-200% per year, it’s no surprise that revenue multiples for venture-backed SaaS firms are higher than the average company. 

Venture deal multiples are higher than M&A exit multiples – as the venture firms usually invest earlier, have preferred shares and liquidation preferences, and firms that take on equity capital are usually the ones that are growing the very fastest (over 50% per year) and thus can command higher revenue multiples than the average M&A deal where the firm is later stage and annual revenue growth rates may be more in the 10-50% range.

Actual multiples achieved will vary of course based on gross margin, churn rates, industry subsector, EBITDA levels, and venture deal competition. Check out the free SEG SaaS Valuation Scorecard for the 20 Factors that go into estimating a firm’s valuation. 

Revenue & EBITDA Multiples By Country

As you can see below, geography also plays a role in Revenue Multiples and EBITDA Multiples. While the ten year (2015-2024) median revenue multiple for SaaS firms was 4.8x globally, in the United States sample set, it was 5.5x. And while the ten year (2015-2025) median EBITDA multiple for SaaS firms was 22.4x globally, in the USA it was 32.1x.

For now, as a SaaS firm it pays to be based in the large market of the USA, where venture capital flows freely and overly strict privacy and labor laws don’t kneecap economic growth, innovation, and job creation like they do in Europe. 

If we look at data for all software companies (SaaS + legacy) from Aventis Advisors, we see that the USA still wins for the top EBITDA multiples, though both China and Norway slightly edged out the USA for median revenue multiples on fewer deals.

The Impact of The Rule of 40 on SaaS M&A Revenue Multiples

The Rule of 40 and NRR are the two biggest factors that differentiate strong vs. weak SaaS companies. Let’s look at the impact of both measures on Revenue Multiples.

To calculate your “Rule of 40” number just add together your annual revenue growth rate for the trailing twelve months and then add to it your EBITDA level for the trailing twelve months. If you have 30% annual revenue growth and 10% EBITDA margins, you’re a Rule of 40 company.

Here’s some data from public SaaS companies on how achieving Rule of 40 status helps a lot with revenue multiples.

The Impact of NRR on SaaS M&A Revenue Multiples

If you break down the median revenue multiples by Annual Net Revenue Retention (NRR), public SaaS firms with <90% NRR had a median revenue multiple at sale of a lowly 1.2x, while public SaaS firms with 100-110% NRR had a median revenue multiple of 6.0x, while public SaaS firms with NRR > 120% had a median revenue multiple at sale of 11.7x. 

The data is clear: working to get your Annual NRR at least above 100% is absolutely essential before a sale process commences and certainly before an IPO.

The Top Private M&A Exits of 2024

In 2024, 26 private software companies exited at a valuation above $1 billion. Some of the most notable acquisitions included the following below:

Who’s Buying: The Most Active Software Company Acquirers

Among the 3,085 software M&A deals in 2024 that had the buyer listed, these were the 22 firms that made at least 5 acquisitions. You can see the full list of top acquirers here.

Total Specific Solutions, Volaris Group, IBM, Vitec Software Group, Autodesk, Cisco, Infinite Reality, Nvidia, Shift4 Payments, and Zuchetti were the most prolific acquirers of 2024. 

Hot M&A Sectors in SaaS

Many buyers are seeking niche SaaS platforms that can give them an edge in a particular vertical. For example, in 2024, nearly 30% of SaaS transactions were in vertical or industry-specific categories (education software, government tech, etc.)​. 

Meanwhile, traditional horizontal sectors like marketing automation, HR tech, and collaboration software have seen consolidation as those markets matured. In 2024, certain categories emerged as M&A hotspots:

• Fintech SaaS (software for payments, lending, and financial operations) saw heavy activity as banks and fintech companies snapped up solutions to broaden their offerings.

• Cybersecurity SaaS has been another priority area for acquisitions (both by security companies and diversified tech firms) given the relentless demand for cloud security capabilities.

• Data analytics and AI-driven SaaS tools also garnered interest, especially from larger cloud players looking to add advanced analytics or machine learning modules.

Geographically, SaaS M&A remains centered on North America and Europe. The United States is by far the largest market – over 50% of global SaaS M&A targets in the past decade have been U.S.-based​. The Bay Area, New York, Boston, and Austin are notable hubs producing many SaaS acquisitions. Europe has grown its share to roughly 20% of global SaaS deals​, led by the UK, France, Germany, and the Netherlands. European buyers (both corporates and PE firms) are increasingly active, and cross-border deals between U.S. and European entities are now common.

Here was the 2024 deal volume for six of the biggest SaaS sectors.

The Top Software Investment Banks

You’ve seen above how helpful the right investment bank can be to a sale.

An investment banker helps market your company confidentially to potential strategic buyers (usually public companies or well capitalized private companies) as well as to financial buyers (PE Firms). The question of course, is who to choose.

If you are smaller than $3M in ARR, you may have to use a platform like Acquire.com or Axial to list and sell your company – or use your own network to find a buyer.

However, once you get into that $3M+ ARR range, more options open up for you – and more investment banks will be willing to work with your firm for a percentage of the sale value that usually ranges from 3-5% depending on the price achieved.

While it may take over $100M in EBITDA to get Goldman Sachs or JP Morgan to be your banker, others are more approachable and accessible for mid-market firms.

In the 531 private software M&A deals in 2024 where the investment bank was noted, the 17 firms that were mentioned at least 5 times were:

You can see the full list here of all 330 investment banks that completed at least one tracked software deal in 2024. 

The Top Mid-Market & Small Deal Software Investment Banks

While this is a good table ranking of the top software investment banks, some of these bulge bracket and blue chip firms are simply out of reach for smaller software companies as they only work with the very largest of private companies who have $100M+ in ARR. 

So let’s see who the most common bankers are for mid-sized deals. In 2024, the 10 firms that did at least 5 software deals under $100M in exit value (that were tracked in Pitchbook) were as follows:

The top 10 mid-market software investment banks by tracked deal count

Many of these firms, in actuality, did many more transactions than shown above; they simply weren’t publicly announced or tracked in Pitchbook – or if they were, the sale price wasn’t announced and as such they didn’t make the <$100M chart above.

Many of the smaller <$100M transactions aren’t listed. So in doing my own separate research, here were the top lower and mid-market software investment banks who specialize in SaaS transactions.

• Agile Equity

• Alantra

• Array Capital 

• Aventis Advisors

• Boopos

• ComCap

• Lightning Partners

• Livmo

• Nfluence Partners

• Peak Technology Partners

• Shea & Co

• Software Equity Group

• ValleyBiggs

• Vista Point Advisors

Types of Acquirer: Strategic vs. Private Equity

There are two major types of buyers in the marketplace for software companies: strategic buyers and private equity firms.

A strategic buyer is an operating company that tends to want to grow the purchased asset while a PE buyer is a private equity firm that tends to want to maximize cash flow from the purchased asset.

In 2024, Software Equity Group saw SaaS M&A deals breakdown as follows:

• Private Equity Fund - 10% of deals

• Strategy Buyers - 39% of deals

• PE-Backed Strategic Buyers - 51% of deals

The Outlook for SaaS M&A in 2025

Industry experts project continued strength in SaaS M&A, with several factors driving activity:

1. Recurring Revenue Appeal: Investors remain highly interested in recurring revenue models, maintaining strong SaaS valuations.
   

2. Private Equity Appetite: PE firms continue to deploy significant capital into SaaS, particularly targeting firms with strong retention and cash flow as roll-ups.
   

3. Public Market Influence: The public SaaS market remains robust, with a median revenue multiples of 6.5-7.5x (depending on data set used), encouraging private acquisitions.
   

4. Sector Specialization: Niche SaaS solutions in fintech, cybersecurity, and AI-driven automation are commanding higher multiples.
   

5. Macroeconomic Stability: Stable interest rates and a strong economy are further incentivizing deal-making.

Focus on Fundamentals: These days, both investors and acquirers in SaaS are emphasizing sound unit economics and profitability. This trend will persist into 2025 and beyond – buyers are diligencing metrics like CAC/LTV, gross margins, and the “Rule of 40” (growth + profit) closely before committing to valuation. SaaS companies that demonstrate a clear path to profitability or already have positive EBITDA are more attractive (and may get a pricing premium or all-cash deal offers). 

Conversely, targets with high burn and no path to profitability might face discounted valuations or limited buyer interest, unless they have truly unique IP. In essence, the market’s sentiment has shifted to favor sustainable growth. 

We anticipate deal negotiations in 2025 will heavily revolve around quality of earnings, retention rates, and efficient growth – those factors will influence not just price but also whether a buyer requires an earn-out.

The Five Big Questions to Ask Before Selling Your Software Firm

When you’re getting ready to sell your SaaS firm, the key questions to ask are:

1. Do you want to sell based on revenue growth or EBITDA? The median SaaS revenue multiple in 2024 for M&A transactions was 4.1x while the median EBITDA SaaS multiple was 19.2x. 

   1. Decide up front if you want to a) go for revenue growth at all costs b) go for revenue growth as long as the CAC payback period is reasonable (say, within 12 months), or c) cut all unnecessary costs and go for maximizing EBITDA before you sell (the PE playbook) → as this one decision will impact your operating plan in the 12 months before you sell.
      

2. Will you use an investment bank or not? I recommend it. A good M&A advisor will pay for themselves many times over. They might charge 3-5%, but they will increase the valuation of your firm by 10-20% just by being involved, helping you prepare your data and company, and getting multiple bidders at the same time.
   

   1. Please see our January 2025 webinars on How to Sell Your SaaS Firm: ($1M-10M ARR) and How to Sell Your SaaS Firm ($10M to $100M ARR) to learn more from our M&A partners
      

3. If so, which investment bank should you use? This will depend a bit on your current ARR and growth rate. Below I list some of the top software focused investment banks.

4. How much of the transaction are you willing to make variable via a performance-based earn out? I recommend as little as possible. While you might get a bit more if you make it based on performance, it’s rather challenging to directly impact results once you’re no longer actually in control of the business. And few founders want to become professional managers for too long.
   

5. How long are you as CEO/Founder willing to stick around after the sale closes? In most situations, I recommend getting out as soon as you can, with 12 months the maximum. The only exception to this is if you’ve tied a large amount of your compensation to a performance-based earnout or equity in the acquiring company and have chosen to stick around because you want to be part of building something bigger. 

Tips to Prepare Your Software Firm For An Exit

Here are some tips for preparing your software firm for an exit at maximum value. These are many of the areas I focus on when we take on consulting assignments to help SaaS CEOs prepare their companies for $100M+ exits.

1. First, decide if you want to exit based on revenue growth or EBITDA multiple. You can expect around 2-10x revenue multiple at sale depending on how fast you’re growing (2024 SaaS Revenue Multiple Median = 4.1x) . You can expect around a 10-40x EBITDA multiple at sale depending on how fast you’re growing (2024 SaaS EBITDA Multiple Median = 19.2x).
   

2. If you want to exit based on revenue multiples then build your sales and marketing team and invest aggressively in customer acquisition from the major channels including digital advertising, outbound campaigns, integrations, and tradeshows – and ramp up your SDR and AE teams if your ACV is >$10k. 

   1. See my SaaS Marketing Checklist or hire us to scale up your customer acquisition pre-exit. We focus a lot on scaling up paid acquisition for SaaS firms via Facebook, Instagram, Google Search, Google Display, Bing Search, Bing Display, LinkedIn, and Adroll – using a combination of search ads, retargeting ads, lookalike audiences, and custom ABM audiences.

3. Focus on getting your churn down (ideally under 3% per month for an SMB firm and under 2% per month for a midmarket firm, and under 1% per month for an Enterprise firm). See if you can get your net revenue churn to be positive – meaning the amount you’re gaining from existing customer upgrades outweighs the amount you’re losing from customer churn. Firms with positive net revenue churn and monthly account churn percentages <2% tend to get the highest premiums on their valuations. Check out the SEG SaaS Valuation Scorecard for 20 Factors that go into estimating a firm’s exit valuation.
   

4. If you want to exit based on revenue multiples, build out your C-level team and put in place a top quality COO, CFO, CRO, CTO, and CPO over time. Your goal should be for the company to be able to operate without you. Learn to work ON the business not IN the business. To test how you’ve done, take a 1-2 months off for a vacation and if the company isn’t stronger and doesn’t have more customers and revenue when you departed – you’ve haven’t set up your team to be exit ready – and you may end up getting stuck in a 2 year earn out transition post-exit.
   

5. If the revenue growth just isn’t there, but you’re profitable and you want to exit based on an EBITDA multiple – cut all unnecessary expenses for 1-2 quarters and THEN hire a banker and go to market using your projected annual EBITDA. If you can reasonably show $1M+ in projected annual EBITDA, you should be able to hire a good midmarket investment banker, get multiple deal offers from PR firms and strategics, attract a 10-25x EBITDA multiple and have a nice exit. 

Conclusion - A Vibrant SaaS M&A Ecosystem

The SaaS M&A landscape in 2025 remains vibrant, with strong valuation multiples, active investors, and a favorable deal environment. If you’re considering an exit, now is a great time to prepare your business for maximum valuation.

If you’re not already a member, we encourage you to join the SaasRise community so we can continue to support you and your firm with exit prep.

For SaasRise members, we can make introductions to the right M&A advisors for your SaaS firm based on your size and vertical.

For personalized M&A advisory, reach out to our team, and let’s navigate the best path for your SaaS firm’s future. Let me know if you need help scaling and preparing for an exit. 

I’ll be back in touch next week with more great SaaS growth and exit content. 

All the best,
Ryan

P.S. - It’s a great time in SaaS! Let me know if you need help scaling and preparing for an exit.

Join Our Community of SaaS CEOs & Founders

Thanks for reading. We hope this SaaS M&A Report 2025 has been helpful to you. Please take a moment to learn more about SaasRise, our community for SaaS CEOs and Founders. We welcome all CEOs and Founders with $1M-$100M in ARR to join us. We hold three masterminds each week for our members and provide an in-depth library of SaaS growth, fundraising, and exit resources. You can apply here.

See you next week with more killer SaaS scaling content!

Join Our Community for SaaS CEOs at $1M+ in ARR

If you like this type of content, please apply to join SaasRise our community for SaaS CEOs with $1M-$100M in ARR here. It’s a mastermind community of growth-focused SaaS CEOs. Membership is $197 per month – but might just be the difference between your firm making it across the chasm and getting to a successful nine figure outcome from a PE firm or strategic acquirer.

Thanks for reading! If you liked this article, join the SaasRise community at www.saasrise.com for even more helpful growth content and weekly SaaS CEO masterminds.

About The Author

We’ll see you next time with more great SaaS growth and scaling content!