Ben Forlani is founder & CEO of Dedale Intelligence, delivering strategic intelligence to tech investors across Europe and North America.
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For much of the past decade, growth was the defining feature of technology investing. Venture capital and private equity firms alike competed aggressively for companies able to deliver consistent double-digit expansion. In the software sector in particular, strong revenue growth combined with scalable economics created a powerful narrative: as long as a company could maintain momentum, valuations would follow.
But as we entered 2026, growth itself has become a scarce resource.
Across many segments of the B2B software market, average growth rates have slowed considerably compared with the peak years of the last cycle. The reasons vary, from macroeconomic pressure and market saturation to customer spending discipline, but the implications for investors are clear: when growth becomes harder to find, it becomes far more valuable.
This shift is reshaping how investors evaluate opportunities, how companies position themselves and how capital flows across the technology landscape.
During the pandemic and the years that followed, technology companies benefited from extraordinary demand acceleration. Digital transformation initiatives, remote work adoption and cloud migration drove strong expansion across many software categories.
Today, those tailwinds are weaker.
Many companies have already implemented price increases over the past several years to sustain top-line performance, leaving less room for further pricing leverage. At the same time, end markets are becoming more mature in several software categories, especially in North America.
As a result, investors increasingly see growth not as a baseline expectation but as a differentiating asset. Companies capable of sustaining strong expansion, while maintaining healthy margins, command a premium in both public and private markets.
This has reinforced a renewed focus on balanced performance metrics. Instead of prioritizing growth at any cost, investors increasingly look for companies able to combine strong revenue expansion with disciplined profitability. In practice, many investors now view a profile such as 20% to 30% revenue growth combined with double-digit EBITDA margins as an attractive balance.
In short, quality growth has replaced growth alone as the defining metric of success.
Another trend shaping technology investment is the growing valuation gap between the U.S. and European software markets.
Historically, American software companies have commanded higher valuations than their European counterparts, reflecting deeper capital markets and faster growth rates. But that gap has widened in recent years.
One reason is simple: growth trajectories differ significantly between regions. In many segments of the U.S. market, software companies continue to achieve double-digit revenue expansion. In parts of Europe, growth rates have slowed more dramatically as companies operate in smaller or more fragmented markets.
This divergence has important implications for investors. While Europe continues to produce high-quality software companies, investors increasingly require stronger evidence of growth potential before assigning premium multiples.
For founders and executives, it means that demonstrating international scalability and clear market expansion strategies is becoming more critical than ever.
Slower growth also tends to trigger another dynamic: consolidation.
When organic expansion becomes harder to achieve, many companies turn to acquisitions as a way to accelerate revenue growth and strengthen their market position. In software, this often results in the emergence of large consolidators building platforms through dozens, or even hundreds, of acquisitions.
The model has become increasingly visible across Europe as well as North America. Some companies are adopting strategies similar to those pioneered by well-known serial acquirers in the software industry, acquiring smaller vertical solutions and integrating them into larger portfolios.
For investors, consolidation can provide an alternative path to value creation in a slower-growth environment. Instead of relying solely on organic expansion, companies can generate returns through operational improvement, cross-selling and strategic M&A.
At the same time, the boundaries of the software investment universe are beginning to shift.
Artificial intelligence (AI) is not only transforming software products, it is also increasing the attractiveness of technology-enabled services. Companies that combine software capabilities with human expertise are increasingly able to deliver productivity gains that pure software platforms may struggle to match.
Examples include data consulting firms, digital transformation specialists and companies building operational workflows around AI tools and automation.
These hybrid models are gaining investor attention because they can benefit directly from AI-driven efficiency improvements while maintaining strong customer relationships and recurring engagements.
In some cases, these businesses may prove easier to scale through acquisitions than pure software companies, making them appealing candidates for buy-and-build strategies.
In a market where growth is harder to generate, investors must become more selective about where they deploy capital.
Three principles stand out.
• Prioritize Sustainable Growth: Clearly identify where future expansion will come from, whether through new markets, product extensions or deeper customer penetration. Investors increasingly expect management teams to demonstrate not only past performance
• Look Beyond Traditional SaaS Models: Leaders should assess how their businesses can integrate data, services or AI-enabled capabilities to strengthen their value proposition. Hybrid models that combine software with operational execution are becoming more attractive as they offer both scalability and defensibility.
• Embrace Strategic Consolidation: In slower-growth environments, acquisitions can become a key lever for scaling. Companies that proactively use M&A to expand capabilities, accelerate go-to-market strategies or strengthen positioning are better equipped to sustain long-term growth.
The technology investment landscape is not shrinking, it is evolving.
As growth becomes more scarce, the companies capable of sustaining it will stand out more clearly. At the same time, new models are emerging that combine software, services and AI in ways that may reshape the next generation of technology platforms.
For investors willing to adapt their frameworks, this environment offers opportunities as compelling as those of the previous decade, just with a different set of rules.
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