Who Are the Most Active Buyers of Software Companies Right Now?

In today’s software M&A landscape, the question isn’t whether there’s buyer interest — it’s who’s still writing checks, and why. As macroeconomic uncertainty lingers and valuation multiples recalibrate, the buyer universe has shifted. Some players have pulled back. Others are doubling down. For software founders and CEOs considering a sale or capital raise, understanding who’s active — and what they’re looking for — is critical to positioning your company for a successful outcome.

This article outlines the most active categories of buyers in the software M&A market today, what’s driving their strategies, and how sellers can align with the right acquirers.

1. Private Equity Firms: Still the Dominant Force

Private equity (PE) firms remain the most active buyers of software companies, particularly in the lower-middle and middle market. Despite tighter credit conditions, many PE funds are sitting on record levels of dry powder. According to PitchBook’s Q1 2024 Global PE Report, software continues to be one of the most targeted sectors, accounting for over 25% of all PE deal volume.

What’s changed is how PE firms are deploying capital:

• Platform + Add-On Strategies: Many firms are focused on building vertical software platforms through roll-ups. A PE firm may acquire a $20M ARR platform and bolt on smaller $3–10M ARR companies to expand functionality or geographic reach.
• Operational Playbooks: Buyers are increasingly focused on operational efficiency — not just growth. Firms with proven playbooks for improving retention, pricing, or sales efficiency are winning deals.
• Valuation Discipline: PE buyers are more selective on price. As we noted in EBITDA Multiples Continue to Trend Lower, multiples have compressed, especially for companies with subpar retention or low margins.

Firms like Thoma Bravo, Vista Equity, and Insight Partners continue to lead the charge at the upper end, while a long tail of sector-focused PE firms are active in the $10M–$100M enterprise value range.

2. Strategic Acquirers: Selective but Opportunistic

Strategic buyers — including large public software companies and private tech incumbents — are still active, but more cautious. Many are focused on profitability and capital efficiency in their own operations, which has tempered M&A appetite. That said, when a target aligns with a strategic roadmap, these buyers can move quickly and pay a premium.

Key themes driving strategic acquisitions:

• AI and Automation: Companies with proprietary AI models or automation capabilities are in high demand. Strategic buyers are looking to accelerate their AI roadmaps through acquisition.
• Customer Base Expansion: Acquirers are targeting companies with strong customer relationships in adjacent verticals or geographies.
• Product Gaps: Strategics are filling holes in their product suites — especially in areas like cybersecurity, DevOps, and vertical SaaS.

For example, Adobe’s acquisition of Figma and Cisco’s purchase of Splunk reflect a broader trend: strategic buyers are willing to pay up for category leaders that offer long-term strategic value.

3. Founder-Led and Bootstrapped Buyers: A Growing Niche

In the sub-$10M ARR range, a new class of buyers has emerged: founder-led holdcos, micro-PE firms, and search funds. These buyers often target profitable, bootstrapped SaaS businesses with low churn and strong cash flow. Their value proposition? Long-term stewardship, not a quick flip.

These buyers are particularly active in:

• Vertical SaaS: Niche markets with loyal customer bases and low competition.
• Low-Churn, High-Margin Models: Businesses with 90%+ gross margins and 90%+ net revenue retention.
• Owner Transitions: Founders looking to exit without joining a large corporate structure.

While these buyers may not offer the highest headline price, they often provide flexible deal structures, including seller financing or earn-outs. For founders prioritizing legacy or team continuity, they can be a compelling option.

4. International Buyers: Expanding U.S. Footprints

Cross-border M&A is rebounding, particularly from European and Canadian buyers seeking U.S. market access. These acquirers are often looking for:

• U.S.-based customer bases
• Established go-to-market teams
• Regulatory or compliance capabilities (e.g., HIPAA, SOC 2)

However, cross-border deals come with added complexity. As we’ve discussed in What Are the Regulatory Hurdles in Cross-Border M&A for Tech Companies?, sellers should prepare for additional diligence around data privacy, IP ownership, and tax structuring.

5. Corporate Venture Arms and Growth Equity

While traditional venture capital has pulled back from late-stage rounds, corporate venture arms and growth equity firms are selectively investing in companies with strong fundamentals. These buyers often pursue minority investments with board seats and strategic alignment, rather than full acquisitions.

For founders not ready to sell outright, this can be a way to de-risk personally while continuing to scale. However, these deals require careful structuring — especially around control provisions and future exit rights.

How Sellers Can Align with the Right Buyer

In today’s market, it’s not just about finding a buyer — it’s about finding the right buyer. That means understanding your company’s profile and matching it to the right buyer type:

• High-Growth, Venture-Backed SaaS: Likely to attract strategic buyers or growth equity firms.
• Profitable, Bootstrapped Software: Attractive to PE firms, holdcos, and search funds.
• AI-Enabled or Data-Rich Platforms: In demand from both strategics and PE firms building AI portfolios.

At iMerge, we help software founders navigate this landscape by identifying the most aligned buyer profiles, preparing for due diligence, and structuring deals that maximize value. As we’ve outlined in Exit Business Planning Strategy, early preparation and positioning are key to attracting the right acquirer — and commanding a premium.

Conclusion

The software M&A market remains active — but it’s more nuanced than ever. Private equity firms continue to lead in volume, while strategic buyers are selectively pursuing high-impact deals. Meanwhile, a growing ecosystem of founder-led buyers and international acquirers is reshaping the lower middle market.

For founders, the takeaway is clear: know your buyer universe, understand what they value, and prepare accordingly. The right buyer is out there — but finding them requires strategy, positioning, and expert guidance.

Founders navigating valuation or deal structuring decisions can benefit from iMerge’s experience in software and tech exits — reach out for guidance tailored to your situation.