NEW YORK, March 1, 2022 (Newswire.com) - Axial, the online M&A platform connecting buyers, advisors, and sellers of small and medium-sized businesses, today released its Software Top 50, profiling the platform's top 50 Lower Middle Market Software Private Equity Investors and M&A Advisors. Axial assembles the annual Software Top 50 based on dealmaker activity on the Axial platform, prioritizing and quantifying factors such as the ratio of software deals to total deals brought to market, deal by deal IOI and LOI activity, and the performance of software-specific buy-side mandates on the platform.
"Public market software company valuations have been battered starting in November of 2021. Over 50% of Nasdaq companies are down 40% or more off their highs," says Peter Lehrman, CEO and Founder of Axial. "We're not seeing that in the lower middle market, where 2022 M&A is off to a brisk pace, with near-record investor interest and plenty of ready capital available to fund deals."
In 2021, M&A activity in the Technology sector increased 56% in 2021, up from 2020's modest 7% increase, led again by software deals. Up 26% last year, software companies represented over 40% of all sell-side technology-related deal activity on Axial. Interestingly, the Covid-19 pandemic appeared to have a direct impact on the lower middle market's fastest-growing tech sector, retail technology (e-commerce and computer hardware/software), where deal volume increased 132% YoY. Technology services were 2021's second-fastest-growing sector at 64%.
"What we're seeing in software M&A in the lower middle market is really a continuation of the dominant trends which emerged in 2020," says Dani Forman, Director of Research at Axial. "The pandemic drastically changed consumer behavior to the benefit of the software and broader technology sectors, as more and more consumers got used to shopping, working and living much of their lives online. As a result, acquisition interest in smaller software companies supporting these technology-driven trends hit record highs, often with equally record-breaking valuations. We expect this trend to continue in 2022."
Axial is the online M&A platform for buyers and sellers of small and medium-sized businesses. The company's pioneering deal sourcing and deal marketing platform is trusted by professional buyers, M&A advisors, and business owners to source opportunities, confidentially and digitally exchange critical deal information, and quickly assess the quality and reputation of potential deal partners. For more information on Axial, visit www.axial.com.
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Dani Forman, Director of Research
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