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1Q24

SaaS M&A and Public Market Report

SaaS M&A Deal Volume Forecasted to Rise

Software deal volume remains strong, totaling 823 deals in 1Q24. Despite a recent decline in SaaS M&A activity over the past two quarters, the 486 SaaS deals in 1Q24 far surpass pre-2022 levels, marking a 50% increase from the Q1 average of 2019-2021. Anticipating three interest rate cuts by the Federal Reserve this year, deal volume is forecasted to rise throughout the remainder of the year.

At SEG, we understand that data is more than just numbers—it’s your strategic advantage. With meticulous analysis of stock and financial data from over 120 publicly-traded SaaS companies and hundreds of software & SaaS M&A transactions, our SEG Research Reports uncover quarter-over-quarter trends and pivotal moments shaping the industry’s trajectory into 2024.

The Top 3 Highlights

486
SaaS M&A Deals Completed

SaaS deal volume is up 50% over the pre-2022 average.

16%
SEG SaaS Index™ Updates

16% of the SEG SaaS Index™ is trading at >12.5x EV/TTM Revenue, up from 5% in 1Q23.

9.9x
Median EV/TTM Revenue Multiple

The upper quartile of the SEG SaaS Index™ reached a median EV/TTM multiple of 9.9x. These companies had median revenue growth of 25% and EBITDA margin of 29%.

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Public SaaS Companies

The public market section provides a comprehensive analysis of stock prices, financial data, and valuation performance for over 120 publicly traded B2B software companies constituting our SEG SaaS Index™. Notably, the percentage of Index companies trading at >12.5x EV/TTM revenue multiples surged from 5% in 1Q23 to 16% in 1Q24, signaling a resurgence among top performers. Additionally, the Index’s swift transition toward capital efficiency underscores the SaaS industry’s enduring earning potential.

Notable Public SaaS Companies

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SEG SaaS Index EV/Revenue by Product Category

Multiple categories in the Index exhibited higher median EV/TTM revenue multiples in 1Q24 compared to 1Q23, reflecting the overall strong performance of many Index companies in 2023. Notably, DevOps & IT Management and Security experienced the most significant increases, with revenue multiples rising from 6.6x to 10.1x and from 7.5x to 10.3x, respectively.

EV/Revenue by Product Category
Quarterly Medians
1Q23
2Q23
3Q23
4Q23
1Q24
SEG SaaS Index
5.9x
5.9x
6.0x
5.8x
6.0x
Analytics & Data Management
5.4x
5.4x
5.9x
6.0x
5.9x
DevOps & IT Management
6.6x
8.1x
10.8x
9.0x
10.1x
ERP & Supply Chain
8.0x
8.6x
8.3x
7.7x
8.6x
Sales & Marketing
5.3x
5.1x
5.5x
5.0x
5.2x
Security
7.5x
7.3x
7.0x
7.6x
10.3x
1Q23
SEG SaaS Index
5.9x
Analytics & Data Management
5.4x
DevOps & IT Management
6.6x
ERP & Supply Chain
8.0x
Sales & Marketing
5.3x
Security
7.5x
2Q23
SEG SaaS Index
5.9x
Analytics & Data Management
5.4x
DevOps & IT Management
8.1x
ERP & Supply Chain
8.6x
Sales & Marketing
5.1x
Security
7.3x
3Q23
SEG SaaS Index
6.0x
Analytics & Data Management
5.9x
DevOps & IT Management
10.8x
ERP & Supply Chain
8.3x
Sales & Marketing
5.5x
Security
7.0x
4Q23
SEG SaaS Index
5.8x
Analytics & Data Management
6.0x
DevOps & IT Management
9.0x
ERP & Supply Chain
7.7x
Sales & Marketing
5.0x
Security
7.6x
1Q24
SEG SaaS Index
6.0x
Analytics & Data Management
5.9x
DevOps & IT Management
10.1x
ERP & Supply Chain
8.6x
Sales & Marketing
5.2x
Security
10.3x
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SaaS M&A Activity

SaaS M&A remained robust annually, with 2023 being the second-highest year recorded. However, in the first quarter of 2024, there were 486 deals, showing a 5% increase from the previous quarter (464 deals in 4Q24) but a 14% decrease YOY (567 deals in 1Q23). The decline in the last two quarters is likely due to factors such as regional bank instability in early 2023, macroeconomic concerns, and a high-interest rate environment. Nonetheless, the 486 deals in 1Q24 still significantly surpass pre-2022 levels, marking a 50% increase from the average in Q1 from 2019 to 2021.

M&A Deal Volume

Quarterly

M&A Deal Volume

Monthly
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Vertical M&A Activity

In 1Q24, vertically focused businesses accounted for nearly half of all transactions, consistent with 1Q23 figures. Healthcare and Financial Services were the most active verticals, comprising 16% and 15% of SaaS deals, respectively. Notably, Hospitality, Retail, and Manufacturing witnessed increased activity year-over-year, indicating a broadening focus among investors.

Financial Services
Healthcare
Real Estate
Education
Hospitality
Retail

Healthcare M&A

Quarterly
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Buyers of SaaS

Buyers and investors have continued their trend of prioritizing durable and sustainable M&A targets in response to current market conditions. Private equity investors remain dominant, representing 59% of SaaS M&A deals in 1Q24. Strategic buyers, comprising 40.7% of deals, saw their most active two-quarter period since 1Q22. While private equity remains influential in 2024, the resurgence of public equities suggests strategics will maintain increased activity throughout the year.

SaaS M&A Activity by Buyer Type

1Q24
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Insights to Drive Stronger Software M&A Performance

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Interactive Market Maps
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SEG SaaS Index Page
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State of SaaS M&A: Buyers' Perspectives

Archived Reports

If you are looking for a past version of SEG’s Annual or Quarterly Reports, you can now download all previously published reports from our archived section.

Annual
2023 ANNUAL REPORT
2022 ANNUAL REPORT
2021 ANNUAL REPORT
2020 ANNUAL REPORT
Quarterly
3Q23 QUARTERLY REPORT
2Q23 QUARTERLY REPORT
1Q23 SaaS M&A REPORT
1Q23 SaaS PUBLIC MARKET REPORT
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1Q24 SaaS M&A and Public Market Report

1Q24 SaaS Report

Gain strategic insights into the SaaS industry with our latest report. Click the button to download your copy.