The topic of software-as-a-service (SaaS) may have peaked in February—but if you look at data processing, SaaS still looks alive.
For the last quarter of 2025, the SaaS M&A business reached $83.7 billion in total, the latest PitchBook data found. This was in at 245 deals, a slight drop in the number of deals quarter over quarter, but a huge jump of around 24% in sales value. Overall, this means that 2025 was the biggest year for SaaS business M&A since the fever peak of 2021.
On the face of it, maybe not what you expected. We are a few weeks removed from the so-called February SaaSpocalypse. In the 24 hours after the release of Anthropic’s Claude Cowork AI, the software’s public markets plummeted: $285 billion in market value disappeared violently overnight. (Since, some of the toughest ones, including Salesforce, Adobe, and Workday, are either gone or moved on — even though they’re all still a year old.)
The SaaSpocalypse, in the end, was a knee-jerk reaction, where AI is (slowly, in most cases) pulling down the technology stack. And this series of PitchBook notes is a reminder that the story of the “death of SaaS”, although it is a nightmare for the multiples of the public market, is not really any obstacle to the independent markets.
“The SaaSpocalypse is accelerating M&A rather than slowing it down, and I expect corporate SaaS M&A to remain active through 2026,” said Derek Hernandez, senior analyst at PitchBook, in an email. “The strong pressure on public software multiples has made private equity more affordable for PE backers who were already offering record amounts.” Additionally, M&A involving PE-backed SaaS businesses has increased over 100% YoY by 2025 to $89 billion.
However, SaaS properties are highly concentrated. These Q4 M&A numbers are bolstered by $17 billion in mega-deals, which comprise more than 75% of Q4’s total deal value. The largest deals included IBM’s $11 billion purchase of Confluent and Permira and Warburg Pincus’ $8.4 billion deal for Clearwater Analytics. (In particular, the strategies really came to light in Q4, when corporate M&A increased quarter-over-quarter by 168.5%, reaching $51.8 billion.)
Perhaps it is also not an exaggeration to say: We may be entering a golden moment for SaaS offerings. Public market woes are likely to drive stocks lower in the near future, while AI momentum remains high.
For the record, I think the “death of SaaS” is to some extent real. It is not directly related to the Salesforces or Workdays of the world (it will certainly be around by the end of the decade). But how to do business in the SaaS-era, ARR-reliable, to sell seats? It’s definitely on its way out. And as it continues, deals will flow.
See you tomorrow,
Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com
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A KNOWLEDGEABLE TRAVELER
– OpenFXMiami, Fla. based on the platform’s foreign investment funds, raised $94 million in Series A funding from M13, Accel, Atomic, The speed of light Faction, Northzoneand Panther.
– Dig upA New York City-based AI code analysis and governance platform has raised $70 million in Series B funding. Qumra Capital city he led the way around and was joined by Caretaker Ventures, Phoenix Capital city Partners, S Ventures, Square Peg, Susan Ventures, TLV Partnersand others.
– PlaceTel Aviv, an Israeli-based developer of AIs for video game marketing, has raised $30 million in Series B funding. Greenfield Partners took the lead and was joined by existing investors F2 Ventures and Bessemer Determination Partners.
– Mars MenThe Austin, Texas-based men’s health and performance brand has raised $27.5 million in Series A funding. L Catterton take the lead.
– Jiminy Good healthNew York City developer of AI infrastructure designed for behavioral health providers, has raised $17 million in seed funding from. M13, The city Hall Ventures, LionBird, Zetta Determination Partnersand One mind.
– EnclaveTel Aviv, an application security company based in Israel, raised $6 million in funding. 8VC he led the round and was joined by angel investors.
RESTORATION OF EQUITY
– Look Investment Partners found Omni Financial Advisory Groupfinancial advisory practice in Poughkeepsie, NY. Financial terms were not disclosed.
– Miller Environmental Groupportfolio company of Coalesce Capital cityget Haz-Mat Environmental ServicesCharlotte, NC environmental services company, and Cancoa Chester, SC based industrial and cleaning services company. Financial terms were not disclosed.
– Global Plant Servicessponsored by It’s new Country Capital Partnersget Machines SolutionsA Whippany, NJ-based fluid machine and turbomachinery systems company. Financial terms were not disclosed.
– Vision Innovation Partnerssponsored by Gryphon Investorsget Frederick Eye CenterFrederick, Md.-based ophthalmology practice. Financial terms were not disclosed.
GET OUT
– TruArc Partners found Matrix Adhesives The groupa Westerville, Ohio-based adhesives and sealants company, since Goldner Hawn. Financial terms were not disclosed.
PEOPLE
– Anzu PartnersA business firm based in Washington, DC, is recommended Josh Sling to the principal.
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