The research draws on data from 2,700 SaaS mergers and acquisitions. With an increase of 28% over 2024, this was the highest annual SaaS M&A activity on record.
ENCINITAS, CA, UNITED STATES, February 9, 2026 /EINPresswire.com/ — Software Equity Group (SEG), an M&A sell-side advisory firm specializing in software, SaaS, and AI transactions, has released its 2026 Annual SaaS M&A Report, examining 2025 deal activity, valuations, and market dynamics.
The research draws on data from nearly 2,700 SaaS mergers and acquisitions and performance metrics from more than 100 publicly traded SaaS companies in the SEG SaaS Index™. With an increase of 28% over 2024, this was the highest annual SaaS M&A activity on record.
Private equity buyers remained the most active acquirers in 2025, with involvement in nearly 58% of all deals.
The surge in deal volume reflects not only improving buyer confidence and more stable financing conditions, but also structural shifts reshaping the market. Lower barriers to entry and rapid AI adoption have accelerated both new company creation and acquisition activity.
“AI has become a critical factor in how companies are evaluated,” said Austin Hammer, report author and principal at Software Equity Group. “Buyers are paying closer attention to AI execution, not hype. Valuation premiums are tied to proven use cases, defensible implementation, and measurable impact.”
Key Findings from the 2026 Annual SaaS M&A Report
**The valuation gap is widening: Top-performing companies are achieving premium, double-digit multiples while a larger share of transactions was clustered at lower single-digit outcomes in 2025.
**AI is driving deal flow: 72% of SaaS M&A transactions referenced AI in target company positioning, underscoring how quickly AI has become embedded across product portfolios and buyer priorities.
**Profitability has strengthened: Median EBITDA margins across the SEG SaaS Index™ reached 9.1% in 2025 as public SaaS companies achieved greater scale and operational efficiency.
**Buyers continue to reward durability: SaaS companies with strong recurring revenue retention and products embedded in core customer workflows were most likely to attract buyers and premium valuations.
For founders and operators, the findings highlight a more polarized exit environment where execution, efficiency, and differentiation increasingly determine outcomes.
Access the full 2026 Annual SaaS Report at https://softwareequity.com/research/annual-saas-report.
About Software Equity Group Research
Software Equity Group is dedicated to analyzing software, SaaS, and AI M&A activity, valuation trends, and public company performance. SEG research, including the Annual and Quarterly SaaS M&A Reports, Buyers’ Perspectives Report, sector-specific deep dives, and the SEG SaaS Index™, is widely used by founders, operators, and investors to understand evolving market dynamics.
Lindsay Young
3 Aspens Media
lindsay@3aspensmedia.com
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