Software Club Market Update December 2024-January 2025

We are pleased to share the latest Software and Private Equity market review from our partners at Software Club. As a prominent executive search organisation specialising in Software and Private Equity, we are working with Software Club to provide a strong data foundation for our efforts and to enhance our daily market observations.

We have included a snapshot from the impressive report for your interest, but there is much more to discover. If you would like the full copy, please get in touch with Ed Fanshawe or Tim Chamberlain.

Here is a snapshot of several important points that the team at Software Club highlight:

    • B2B software deals have increased in value and volume in 2024 but remain below pre-COVID levels.

 

    • IPOs are particularly slow to restart, but improving market conditions in 2024 (higher valuation and lower interest rates) could nurture hopes of reacceleration, which we are starting to see on the Executive Search side.

 

    • Valuations increased in 2024 from an EV/Sales NTM perspective (to 6.4x) while EV/EBITDA NTM slightly decreased to 25.8x. The key nuance is the deceleration of growth (from 13.4% in ’23 to 10.8% in ’24) and substantial increase of margins (FCF margins going from 13.9% in ’23 to 16.3% in ’24), making now growth at a 72% premium to margins. In particular – the major tech platforms, Industrial & Infra software, and supply chain software are trading well above 10-year multiples.

 

Click on through the slides below: