Q3 2021 Software Industry Trends

Q3 2021 Key Highlights

The industry’s largest deal in Q3 2021 was Intuit’s announced acquisition of MailChimp, a marketing automation platform best known for its email marketing solutions, for $12 billion.

There were 579 financially sponsored transactions in the 1st 3 Quarters of 2021 with an aggregate value of $139 billion, representing 26 percent of the total volume and 50 percent of the total value, respectively.

Q3 2021 Key Trends

Total transaction volume in the 1st 3 Quarters of 2021 increased by 33 percent over the 1st 3 Quarters of 2020, from 1,643 to 2,186.

Total transaction value in the 1st 3 Quarters of 2021 more than doubled over the 1st 3 Quarters of 2020, from $108.1 billion to $278 billion.

The segment with the largest rise in volume in the 1st 3 Quarters of 2021 over the 1st 3 Quarters of 2020 was Infrastructure Software with a 43 percent gain, from 191 to 273 transactions.

Multiples & Value Trends

The median revenue multiple on a year-over-year basis rose by 70 percent, from 3.0x to 5.1x.

The median EBITDA multiple on a year-over-year basis improved by 34 percent, from 13.5x to 18.1x.

Top Ten Deals Through Q3 2021

The top ten deals by value have seen three new additions since our half year report.

Two of these deals were completed by financial sponsors: a consortium led by Nordic Capital and Insight Venture Partners announced its acquisition of Inovalon, a provider of cloud-based platforms supporting data-driven healthcare, for $7.3 billion; and Thoma Bravo announced its acquisition of Medallia, an experience management company that leverages proprietary AI to help companies better understand their customers and employees, for $5.9 billion.