SEG Research

2026 Buyers’ Perspectives Report

How Private Equity and Strategic Acquirers Are Evaluating SaaS Businesses Today

Over the past year, buyer sentiment in SaaS has shifted. Activity has increased, and competition has returned, but selectively. The gap between premium assets and the broader market is widening.

At the same time, buyers are now actively factoring artificial intelligence into how they evaluate risk, durability, and competitive advantage.

SEG’s 4th Annual Buyers’ Perspectives Report shares insights from more than 200 private equity investors, strategic acquirers, and SaaS CEOs to examine value, risk, and durability in 2026. The report also draws on findings from SEG’s broader market research and transaction experience.

The Top 3 Highlights

85%

AI-driven commoditization is the biggest risk to SaaS

Buyers view loss of differentiation is viewed as a critical risk, with direct implications for valuation and buyer appetite.

63%

Reporting limited AI use in targets in 2025

But 61% of buyers expect companies to be AI-driven by the end of 2026. That exposes a significant gap between current reality and near-term expectations.

50%+

Valuations increased in 2025

More than half of buyers said multiples went up somewhat or significantly year over year for high-quality SaaS businesses.

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A More Competitive and Selective Market

Buyers report clearer visibility into growth drivers and valuation expectations in 2026. Competition is concentrated around companies with:

Scale and revenue durability
Strong retention and capital efficiency
Clear competitive positioning
Credible AI execution embedded within product and operations

A relatively small group of high-performing businesses continues to attract intense competition and premium valuations. Others are still transacting, but with longer timelines, deeper diligence, and wider valuation outcomes.

Volume-of-high-quality-targets-chart2

A Growing Perception Gap

In this year’s research, a meaningful disconnect emerged between how buyers assess AI-related risk and how many operators perceive it.

While many founders cite incumbency and customer relationships as protective buffers, buyers are looking at SaaS companies through a different lens: one that evaluates AI in the context of durability, defensibility, and long-term relevance. About 83% of buyers said they only saw limited use of AI in targets in 2025, but more than half expect SaaS companies to be AI-driven by the end of 2026. Some SaaS CEOs are accelerating decisions to explore an exit, driven by concern about AI disruption or uncertainty around required investment.

When buyers and operators assess risk differently, that gap shows up in valuation, competitiveness, and negotiating leverage.

What Buyers Prioritize in 2026

Core SaaS metrics remain table stakes:

ARR scale and growth
Gross and net revenue retention
Profitability and Rule of 40 performance

These are still the first gate in any evaluation. But now buyers are looking much more closely at the quality and scalability of the technology itself and whether there’s real AI-enabled differentiation. They want to see AI used to improve customer outcomes, remove internal friction, strengthen retention, increase operating leverage, and build long-term defensibility.

The companies getting the most attention can demonstrate both strong numbers and credible, durable technology. Those that can’t are seeing longer processes, heavier diligence, and wider swings in valuation.

Download this report to better understand how active buyers are thinking about investments and what that means for your positioning, timing, and strategy.

About the Authors

The survey content and analysis were jointly developed by Diamond Innabi and Austin Hammer, both Principals at Software Equity Group. Diamond has been with the company for more than a decade, guiding clients through their sell-side M&A journey, sharing insights as a guest on numerous podcasts and driving process improvements to enhance outcomes for SEG clients. Austin has been with Software Equity Group since 2018, leading transactions in a variety of verticals, hosting webinars and authoring our industry-leading quarterly SaaS reports.