Growth equity investors and private equity acquirers are still active in the software space in 2025.
PE and PE-backed strategics remain the primary drivers of software acquisitions, accounting for over 70% of deals in recent years.
They aren’t stopping doing deals this year to wait for how AI will play out.
They are buying into (and buying) up-and-running SaaS companies that don’t have big AI features yet.
They are buying software companies with happy customers, efficient business models, and low churn.
And all of these SaaS businesses will gain lots of leverage with AI in the next few years.
– Getting more done with less inside these businesses. Everyone is getting better inside their businesses with AI
– Adding massive new value with AI features and new AI products that leverage their unique data.
– Building their SaaS better and faster with AI tooling in development.
– Getting much more efficient and effective, so they can avoid big outside funding that makes practical acquisitions impossible.
These companies aren’t selling for crazy valuations.
The founders who are selling all or part of their companies are OK with practical valuations–because they didn’t raise VC funding.
Practical founders can still win big.
They will win bigger with more AI leverage in the next few years.
AI is a massive opportunity for existing SaaS companies.
And it’s also a threat for SaaS companies that don’t move fast to improve their products, GTM, and operations.
That’s how I see it this year. How do you see it?
