M&A Market Dynamics – Software & Technology
- After a significant jump last quarter, the broader technology sector total deal value in Q2 2025 saw a 57% uptick compared to Q1 2025, with $196B in transaction value compared to $125B in the prior quarter. The growth was confirmed across software and other technology segments as well, increasing 41% and 74%, respectively.
- Total software deal volume in Q2 2025 declined 3% from the prior quarter to 791 transactions, yet marked a 47% increase compared to the same quarter one year ago. This reflects a slight rebound from last year’s economic volatility and high borrowing costs, though lingering market pressures persist.
- M&A activity continues to be defined by tariff regulations and ongoing economic uncertainty, prompting companies to adopt a more cautious approach to dealmaking. Strategic investors were particularly affected, with deal volume declining 8% quarter-over-quarter. A recent survey from PwC highlighted this trend, noting that 30% of companies had paused or revisited transactions in response to the uncertain environment. In contrast, private equity activity proved more resilient, supported by modest improvements in debt markets. Sponsors showed renewed interest in high-growth, recurring-revenue niches, likely those positioned to benefit from AI-driven disruption and next-generation technologies.
