KBS - Software-as-a-Service - Market Insight

M&A ACTIVITY CONTINUES TO RISE

M&A in the UK software and SaaS sector has remained strong and continues to rise, driven by a mix of strategic consolidation and renewed investor confidence. In 2024, the total value of transactions increased by around two thirds year on year. Within the software and SaaS space, deal volumes have now surpassed pre-pandemic levels, reflecting sustained appetite from both strategic buyers and private equity. Many acquirers are choosing to buy rather than build new platforms, particularly where specialist software, data analytics or AI capabilities can strengthen their offering and accelerate growth.

Private equity investors remain especially active, pursuing buy-and-build strategies to scale recurring-revenue SaaS businesses and consolidate fragmented markets.

International interest in UK software firms has also grown, with inbound acquirers — particularly from the US — recognising the UK’s strength in innovation, talent and mature SaaS infrastructure.

Overall, M&A momentum in the sector is underpinned by businesses seeking scale, stable recurring revenues, and access to new technology. For company owners, this ongoing demand highlights a strong window of opportunity to explore a sale while market appetite and valuations remain high.

In 2024, the total value of transactions increased by around two-thirds year on year.