The ‘death of SaaS’ could end up being the best thing to ever happen to SaaS M&A

(SeaPRwire) –   While headlines predicting the demise of software-as-a-service (SaaS) may have peaked in February, recent dealmaking data indicates a vibrant sector.

According to new PitchBook data, enterprise SaaS M&A reached $83.7 billion in total value during the final quarter of 2025. This was spread across 245 deals, representing a slight quarter-over-quarter decrease in deal count but a substantial nearly 24% increase in deal value. Overall, 2025 emerged as the most significant year for enterprise SaaS M&A since the peak activity of 2021.

This might not be the expected outcome, especially just weeks after February’s so-called SaaSpocalypse. In the 24 hours following the launch of Anthropic’s Claude Cowork AI, public market software stocks plummeted, with $285 billion in market value disappearing overnight. (Since then, some of the hardest-hit companies, including Salesforce, Adobe, and Workday, have stabilized or rebounded, though all remain down year-to-date.)

Ultimately, the SaaSpocalypse was a knee-jerk, fundamental reaction to the (often gradual) shift AI is imposing on the tech stack. This latest PitchBook data serves as a reminder that the “death of SaaS” narrative, while problematic for public market multiples, poses no obstacle whatsoever to private market dealmaking.

“The SaaSpocalypse is accelerating M&A rather than slowing it down, and I expect enterprise SaaS M&A to remain highly active in 2026,” commented Derek Hernandez, PitchBook senior research analyst, via email. “The sharp compression in public software multiples has made take-privates meaningfully cheaper for PE sponsors who were already deploying record capital. Additionally, M&A involving PE-backed enterprise SaaS surged over 100% YoY in 2025 to $89 billion. What we’re seeing is that flight to defensibility.”

Nevertheless, the benefits within SaaS remain highly concentrated. These Q4 M&A figures were bolstered by 17 multi-billion dollar mega-deals, which constituted over 75% of the total deal value for the quarter. Notable transactions included IBM’s $11 billion acquisition of Confluent and Permira and Warburg Pincus’s $8.4 billion deal for Clearwater Analytics. (Significantly, strategic buyers were very active in Q4, with corporate M&A soaring 168.5% quarter-over-quarter to $51.8 billion.)

It is likely not an exaggeration to suggest that we could be entering a golden era for SaaS deals. The distress in public markets may, for the foreseeable future, make assets more affordable, while the urgency surrounding AI remains high.

For the record, I do believe the “death of SaaS” is real on some level. This doesn’t specifically apply to companies like Salesforce or Workday (they will certainly still be operating at the end of the decade). However, the traditional SaaS-era business model—reliable on ARR and seat-selling—is definitely on its way out. And as it transitions, the deals will continue to flow.

See you tomorrow,

Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@.com

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