Q1 2023 Software Industry Trends

Software transaction volume saw a two percent uptick over the past three months, from 524 to 533. Aggregate value increased 23% from $31.4 billion to $38.6 billion.

M&A activity in the Business Software segment, which consists of software designed for general business practices and not specific industry markets, decreased by nine percent from Q4 2022 to Q1 2023. CPP Investment Board and SilverLake’s acquisition of Qualtrics, a subsidiary of SAP SE, was the largest transaction for Q1 2023, with an acquisition price of $10.4 billion. Qualtrics is a cloud-native software provider that helps organizations quickly identify and resolve points of friction across all digital and human touchpoints in their business.

The number of deals in the Niche Software and Consumer Software segments saw increases of 5.6% and 11.1% respectively, while transaction volume in the Infrastructure Software segment remained nearly constant.

Five of the industry’s top ten largest transactions took place in the Niche Software segment, which is targeted to specific vertical markets, the largest three of which all involved financial buyers. Blackstone’s announced acquisition of Cvent, an industry-leading meetings, events, and hospitality technology provider, for approximately $4.4 billion. Vista Equity Partners’ announced acquisition of Duck Creek Technologies, the intelligent solutions provider defining the future of property and casualty (P&C) insurance, for $2.4 billion. Thoma Bravo’s announced acquisition of Magnet Forensics Inc., developer of digital investigation solutions for public safety organizations, for $653 million.

In the Consumer segment, Playtika Ltd. announced its acquisition of Rovio, a global, mobile-first games company that creates, develops, and publishes mobile games, for $584 million.