Part 1 of 4 The SaaSpocalypse Series
In this episode we’ll explore the challenges and trends shaping private company valuations in the TMT sector. TMT deal volumes across 2024 and 2025 have been more resilient than many expected but a clear story is building, and the early 2026 numbers are beginning to show it.
In this opening session, Doug Lawson, CEO and Co-founder at MarktoMarket, walks through the data: where deals are happening, which parts of the tech sector are holding up and where the pressure is starting to show. He ends by introducing the concept that frames the rest of this series: The SaaSpocalypse – and what it means for anyone who owns, advises or invests in a technology business today.
Watch Part 2: The SaaSpocalypse – how AI is reshaping software valuations
Private company valuations in the tech sector are going through an unusual moment. This is the first in a four-part series from Hardman & Co’s Private Company Valuation Forum, and we’re starting with the data. Doug Lawson of MarktoMarket, is going to walk us through TMT deal volumes across 2024 and 2025, and what the early 2026 numbers are showing. The picture is more nuanced than the headlines, but there’s a clear story building. And, at the end, Doug introduces a concept that frames everything that follows.
Doug Lawson 00:40
Thank you very much, Hardman & Co, for having me again. Rather than looking at the market as a whole, we’ve picked a specific theme – and I think there’s a very live theme going on in the market at the moment, which is ‘The SaaSpocalypse’: the impact on tech companies of large language models. That’s what I’m going to focus on.
To go into a few stats on the market: we now have a good look at what was going on in 2025 versus 2024, so we’ll cover that and then move on to what – admittedly a short time period – the data is telling us about 2026 so far.
This is our definition of TMT – technology, media and telecommunications. Within the technology piece, our subsectors are: software, IT services, tech hardware, fintech, video games and mobile apps. And it’s really within software that we’ve seen the impact of the large language models – what they can do, and the increasing sophistication of these models. That’s where the pressure has been so far, and that’s what we’ll be focusing on.
Looking back at 2025 versus 2024 and deal volumes across the TMT sector – actually, 2025 was a pretty good year. 2024 was a pretty good year as well. We did see a bit of a decline in tech deals specifically.
Through a UK lens: we saw 957 deals in tech involving at least one UK party. These are M&A transactions, not equity raisings – we look at those separately. In media, we saw an uptick to 518 deals, and telecoms was broadly in line. There has been some blurring between telecoms and IT services – IT services sits within the tech category. A lot of firms providing managed services now spread across both telecoms and broader IT services, which is probably why telecoms looks a little lower in volume terms than you might expect.
Rather than deal volumes, let’s now look at deal values.
In tech, involving at least one UK party, we saw £55 billion of deal value in 2025 – up from around £47–£48 billion in 2024. Media was well down and telecoms was down as well. As you’d imagine, the big dial-movers here are the mega transactions. In 2024, for example, we had a couple of £2–£3 billion deals in the media sector: Preqin at £2.7 billion and DAZN at £1.7 billion. In telecoms in 2024, Swisscom bought Vodafone Italy for £6.8 billion. These are significant dial-movers – a couple of mega transactions can really skew the stats one way or the other.
This is looking at valuations. What we always find interesting is the comparison between the UK and the US. It probably won’t surprise you that the UK typically trades at a discount to the US. If you have two broadly similar assets – one UK-focused, one US-focused – you tend to see higher multiples for the US business.
Looking across the TMT sector, multiples actually improved year on year. The revenue multiple across our entire global TMT universe moved from 2.4x in 2024 to 2.7x in 2025. In the UK alone, multiples were up from 2.2 to 2.4 times revenues. And in the US, it was a very strong year for multiple expansion – the median revenue multiple moved from 2.7 times to 3.6 times.
On EBITDA multiples – revenue has traditionally been a common valuation measure for tech companies, particularly SaaS businesses, but EBITDA tells a similar story. We saw good multiple expansion in 2025 versus 2024. Across our entire universe, EBITDA multiples moved from 11.5 times to 13.1 times. In the UK alone, from 10.8 to 12.6. And in the US, from 13.7 up to 15.8. A pretty positive picture for tech company valuations in 2025.
Another interesting angle is what private equity is paying versus strategic buyers. This is actually quite surprising. Normally, you’d expect strategic buyers to pay a premium to PE – they can extract synergies, after all. But that hasn’t been the case when we look at US and UK TMT deals over the last few years. It’s been private equity paying the premium. I think that really speaks to the volume of private equity money chasing high-quality assets – well, assets that were deemed to be high quality, up until recently, which we’ll come on to.
If we do a deep dive into SaaS specifically – going back to the first slide, which showed the different constituents of TMT, within the technology piece, SaaS is really the most important constituent. So, let’s look at that more closely.
As well as looking at sectors to understand how multiples are trending, it’s useful to look at size bands. We have indices that put companies into different buckets based on size. The nano cap bucket, for example, had a median revenue multiple of 1.2 times. That moves to 2.2 times for micro cap, and 3.4 times for small cap.
To give you a feel for the bandings: nano cap is sub-£2.5 million deals; micro cap £2.5 million to £10 million; small cap £10 million to £50 million; mid £50 million to £250 million; large £250 million to £1 billion; and mega is £1 billion plus. This size premium is a theme a lot of investors are actively playing through buy-and-build strategies. The idea is: buy smaller assets at one to two times revenue, aggregate them into a larger group, and sell that group at a much higher multiple.
IdeaGen is a good example of this. It was a listed business that delisted. The exit multiple was 11.8 times revenue. They completed a total of 46 acquisitions, ranging from £700,000 to £150 million, with a median deal size of £8 million. The median revenue multiple they paid for those acquisitions was three times. So, if you pay a median of three times revenue, then sell the combined group for 11.8 times, you get a very significant uplift.
That’s 2025 versus 2024. We now have a few months of 2026 to look at, and the picture has been interesting and, I think, confusing in equal measure. This is a ten-year chart of the S&P 500. When I look at it, the thing that strikes me is the resilience of markets.
We’ve had sell-offs before. You can see the COVID market sell-off, the 2021 rebound driven by massive stimulus, markets coming off in 2022 as interest rates moved up, then cooling inflation in 2023 helping things recover. Then, in Q1 2025, you can see a sell-off – that was the tariffs. And then you see another sell-off at the beginning of 2026. That one is ‘the SaaSpocalypse’.
Larissa Adams 10:08
So, that’s the market context. And Doug’s just landed on a term you’ll be hearing more of: the SaaSpocalypse. In Part 2, he unpacks what it actually means – which software businesses are most exposed, which might benefit, and how it’s already showing up in valuations. Part 2 is next in the playlist.
