All that SaaS
AI torches USD40b in software deals.
Good morning.
AI has blown an almost USD40 billion ($59.8 billion) hole in private equity’s software playbook. According to PitchBook data analysed by the FT, the value of software deals fell to USD50 billion in the first five months of 2026, down from USD88 billion in the same period last year, and the lowest total since the pandemic.
“Until an investor knows what a business may be worth post-AI adoption, it’s impossible for them to make a case to their investment committee,” Paul-Noël Guély of Arma Partners said.
Software company valuations fell 8% in the period, compared with just 0.3% for every other sector, according to a separate Bain & Co report.
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Shares in network-as-a-service provider Megaport surged 11.3% on Friday after the company completed the institutional component of a $827 million entitlement offer, raising $518 million to fund an artificial intelligence push centred on investment in Nvidia chips. Citi upgraded its target price for the stock by 41%.
