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

CURRENT LANDSCAPE

The current landscape for the UK software and SaaS sector remains highly active and increasingly competitive. Deal volumes have risen steadily, with software businesses now representing nearly half of all UK transactions and attracting the majority of capital invested. In particular, SaaS and AI-enabled platforms have seen strong momentum, with both deal numbers and investment values increasing sharply through 2024 and into 2025. Private equity continues to be a major driver of activity, accounting for around 60% of SaaS transactions, as investors look for scalable, recurring-revenue models and opportunities to build value through strategic bolt-ons. Buyers are becoming more selective, focusing on high-quality assets with strong recurring income, high customer retention and a clear path to profitable growth. Strategic acquirers are particularly drawn to niche, vertical SaaS businesses and AI-enabled software platforms that can add differentiation and long-term value to their portfolios.

International interest in UK software firms remains strong, especially from US buyers who view the UK as a mature and innovative technology hub.

While some macroeconomic caution persists, the sector continues to outperform the wider M&A market thanks to its resilience, recurring revenue structures and critical role in digital transformation. Overall, conditions remain highly favourable for business owners considering a sale, with sustained buyer appetite, stable valuations and strong demand for technology-led, scalable platforms.

Private equity continues to be a major driver of activity, accounting for around 60% of SaaS transactions