GCA Software Sector Report Q1 2021

In Q1 2021, M&A deal activity and private financing activity continued to grow whilst software performance in the public markets stagnated
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The GCA Software Sector Report is tailored to the needs of busy executives and investors seeking a comprehensive overview of the M&A and valuation landscape, trend analyses and insights into the current transaction environment.

Key developments in Q1 were:

  • In Q1 2021, M&A deal activity and private financing activity continued to grow whilst software performance in the public markets stagnated
    • Software sector performed below 2020 trends in Q1, with the IGV tech-software index underperforming the S&P 500 by 9.4%
    • Sales & Marketing has outperformed the other software segments, achieving 124% LTM growth as of Q1 2021
  • Q1 ’21 saw ~$40bn in financing deal value and ~$86bn in M&A deal value
    • 424 financings, 100.9% higher than Q1 ‘20
    • 458 M&A transactions, 17.7% higher than Q1 ’20
  • Significant M&A activity in Q1 includes acquisitions in the Security sector: Okta’s $6.5bn acquisition of Auth0 and STG Partners’ $4.0bn acquisition of
    McAfee’s enterprise business
  • Financial software had some of the largest financing deals in Q1 ‘21 led by the $600mm financing of Stripe and $1,290mm financing of Klarna
  • Overall outlook in software growth remains healthy, particularly in the private markets

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