Software H1 2023 Market Update

Public markets have seen early signs of recovery from the doldrums of Q4 2022, with the Alantra software index up 33% in the first half of 2023 compared to an 18% rise for the S&P 500. Valuations have also stabilised, with considerably reduced volatility over the last 12 months and multiples back in line with, or even at a slight premium, to pre-pandemic levels. There is also a continued focus on the Rule of 40 metric as investors value both growth and profitability, albeit with growth still the more important factor.

Despite the market conditions, Alantra continues to be very active and deliver successful outcomes for our clients across all areas of software and SaaS. We have completed 25 deals in the last 24 months, including the recent sales of Griffeye to Thoma Bravo-backed Magnet Forensics and Lendscape to Bowmark Capital, and the minority growth investment by Summit Partners in Tradinghub.