The ‘death of SaaS’ could be the best thing to ever happen to SaaS M&A
The software-as-a-service (SaaS) doomer headlines may have peaked in February—but if you check out the dealmaking data, SaaS has been looking alive.
For the final quarter of 2025, enterprise SaaS M&A hit $83.7 billion in total value, recent PitchBook data found. This was across 245 deals, a slight drop in deal count quarter-over-quarter, but a nearly 24% leap in deal value. All in, this means that 2025 was the biggest year for enterprise SaaS M&A since the fever pitch of 2021.
On its face, perhaps not what you were expecting. We’re a few weeks removed from February’s so-called SaaSpocalypse. In the 24 hours following the release of Anthropic’s Claude Cowork AI, software stocks in the public markets cratered: $285 billion in market value violently vanished overnight. (Since, some of the hardest-hit, including Salesforce, Adobe, and Workday, have evened out or rebounded—though all remain down year-to-date.)
The SaaSpocalypse, ultimately, was a knee-jerk, existential reaction to where AI is (slowly, in many contexts) dragging the tech stack. And this round of PitchBook data is a reminder that the “death of SaaS” story, while a nightmare for public market multiples, is actually not a hindrance in the slightest 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,” said 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.”
Still, the SaaS spoils are very concentrated. These Q4 M&A numbers are bolstered by 17 multi-billion mega-deals, which comprised more than 75% of the total deal value for Q4. The largest deals included IBM’s $11 billion Confluent acquisition and Permira and Warburg Pincus’s $8.4 billion Clearwater Analytics deal. (Notably, strategics really showed up in Q4, as corporate M&A soared quarter-over-quarter by 168.5%, reaching $51.8 billion.)
It’s probably also not an exaggeration to say: We could very well be entering a golden moment for SaaS deals. The public markets’ agony may for the foreseeable future make assets less expensive, while AI urgency remains high.
For the record, I do think the “death of SaaS” on some level is real. It doesn’t pertain specifically to the Salesforces or the Workdays of the world (they will certainly be around at the end of the decade). But the SaaS-era, ARR-reliable, seat-selling way of doing business? That’s certainly on its way out. And as it goes, the deals will flow.
See you tomorrow,
Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com
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This story was originally featured on Fortune.com