Forvis Mazars, LLP, one of the largest public accounting and consulting firms in the United States, today released its H1 2026 State of SaaS Report, produced in partnership with PitchBook. The report examines private equity (PE) dealmaking and exit trends across the global software-as-a-service (SaaS) landscape, along with developments in the technology initial public offering (IPO) market, as capital allocation strategies adjust to compressed valuations and a maturing AI investment cycle.
Findings from the first-half analysis show that AI-driven strategic acquisitions pushed global SaaS M&A value to a decade-high $439.7 billion, even as PE deal activity, exits, and fundraising all pulled back from the second half of 2025. Median SaaS enterprise value/EBITDA multiples fell to 11.7x from 20.4x, signaling the end of the SaaS premium that defined the past decade.
“We are seeing a significant shift in the market as the SaaS premium that defined much of the last decade continues to narrow,” said Ricardo Martinez, partner and national industry leader for technology and software at Forvis Mazars. “Investors are placing greater emphasis on profitability, cash flow, and competitive differentiation. AI continued to drive many of the largest transactions in the first half of 2026, but the broader story is a valuation environment that is becoming more selective.”
Why this matters for private equity investors
According to the report, several structural forces are reshaping SaaS dealmaking and exit activity:
- Dealmaking concentration: AI-driven strategic acquisitions pushed global SaaS M&A value to a decade-high $439.7 billion, while PE deal volume and funding fell to $58.8 billion across 702 deals as sponsors pulled back and billion-dollar transactions grew scarce.
- Valuation reset: Median SaaS enterprise value/EBITDA multiples for PE deals fell to 11.7x from 20.4x, nearly converging with non-SaaS multiples, as AI disruption risk and a higher cost of capital reset long-standing SaaS valuation premiums.
- Exit environment: Global SaaS PE and VC exit volumes slowed to an estimated 1,458 in H1 2026 from 1,652 in full-year 2025, and outside a handful of outlier transactions, the broader exit landscape remains far more muted than aggregate figures suggest.
- Fund economics: Global PE fundraising is on pace for a third consecutive annual decline, with dry powder stagnant near $4.4 trillion and net cash flows negative since 2022, straining the capital-recycling cycle that fuels new investment.
- IPO window: Only 23 SaaS companies went public in H1 2026, and mixed post-IPO performance—including SpaceX’s swift retreat toward its offer price—shows public investors remain far less forgiving than private-market backers.
- Governance and metrics scrutiny: As companies increasingly lean on non-GAAP measures to strip AI-related costs from core operations, boards and investors face growing pressure to look past adjusted metrics to underlying cash-flow durability.
Looking ahead to the second half of 2026, the H1 2026 State of SaaS Report concludes that the industry’s fortunes now depend on execution and fundamentals rather than momentum. Companies that can demonstrate durable cash flow, defensible competitive moats, and disciplined AI integration are best positioned to navigate a narrower opportunity set, a selectively reopening IPO window, and continued scrutiny from public and private investors alike.
“The IPO market is reopening and creating opportunities, but public investors are sending a clear message: growth alone is not enough,” Martinez said. “Companies considering an exit will need to show a compelling combination of financial performance, market positioning, and a credible path to long-term value creation.”
For more insights, download the full H1 2026 State of SaaS Report.
Register now to join Forvis Mazars and Pitchbook for a webinar exploring the latest trends in the SaaS landscape from 2 to 3 p.m. ET on Oct. 14.
