Q1 2025

Software & Tech-Enabled Services M&A Update

In Q1, the North American Technology Software Industry Index decreased by 11.1% and was outperformed by the S&P 500, which decreased by 4.4% over the same period.
The median EV/Revenue multiple for reported private equity deals in the Software & Tech-Enabled Services sector increased to 4.8x in Q1 from 3.9x in 2024, and increased for strategic deals to 4.3x from 2.0x in the prior year.
M&A deal volume in the sector increased 4.8% in Q1 to 1,145 deals from 1,093 in Q4 2024, and increased 22.2% from 937 deals in Q1 of the prior year.
As a % of total capital invested in M&A transactions, PE participation decreased significantly in Q1 to 28.3% from 44.3% in 2024.
North America was the most active region in Q1 with 533 deals. Most notably in North America was Elon Musk’s AI business xAI acquiring X, his social media platform, for $33.0 billion, in March 2025.