Our friends at Software Equity Group have shared their M&A Public Market Report from Q1. As we round the bend into Q2, here are their researched findings from Q1.
The start of 2026 has brought a complicated backdrop, with trade friction, energy and commodity volatility, global conflict, policy uncertainty, and growing debate around AI risk weighing on sentiment. At the same time, AI is creating meaningful room for the sector to evolve and advance, even as it introduces new uncertainty around future growth and competitive positioning.
3 SaaS M&A Highlights:
1. The volatility impacting public markets has not yet materially affected M&A volume, with aggregate software deal activity holding steady in 1Q26 at 1,043 announced transactions, marking the seventh consecutive quarter with more than 1,000 software deals.
2. SaaS M&A activity also remained strong through 1Q26, with 659 announced transactions and 2,734 deals on a TTM basis, up 24% from 1Q25 TTM. Deal volume has remained near historic highs as the software market continues to expand and buyers pursue digital capabilities across a broader set of targets.
3. SaaS M&A valuations have remained relatively consistent and, to date, have not seen the same degree of pressure as public market valuations, though private market moves often lag public-market resets.
2 SaaS Public Market Highlights
4. The SEG SaaS Index was hit by both AI uncertainty and a tougher macro backdrop in 1Q26, falling roughly 25% through the quarter. Investors are reassessing the future growth potential, competitive positioning, and even longterm staying power of SaaS businesses as AI advances rapidly, while broader equity markets have also come under pressure from geopolitical conflict, trade friction, commodity volatility, and policy uncertainty.
5. Valuations across the SEG SaaS Index have reset meaningfully, with pressure felt across the upper quartile, median, and lower quartile alike. Premium multiples are less common today, and a much larger share of the Index now trades in a compressed range.
For the full deck of highlights from the SEG Q1 report, click here.
SEG Research – 1Q26 SaaS M&A and Public Market Report.
To learn more about Software Equity Group, visit, softwareequity.com/research
Clare Christopher is the Editor of Sandhill.com