Insights
Q2 ‘19 saw a number of high profile software IPOs including Zoom Video Communications which soared over 150% from its offer price; M&A volume in the quarter was healthy, bolstered by Salesforce’s $15B acquisition of Tableau
Sector Report: Software Q2 2019
EXECUTIVE SUMMARY
- The global software sector remains one of the most active sectors, with approximately $15 billion in financing volume and approximately $39 billion in M&A volume during Q2 ’19
- 198 financings in Q2 ‘19 is 19% higher than the number of financings in the same period in ’18
- 359 M&A transactions in Q2 ‘19 is 5% higher than the 343 deals consummated during the same period in ’18
- Q2 ‘19 M&A volume was bolstered by Salesforce’s $15 billion acquisition of Tableau Software resulting in a 22% M&A volume growth over Q2 last year
- Business and Productivity Software had one of the highest financing volume and deal counts in Q2 ‘19 led by the $500 million financing of Kaseya and $300 million financing of Carta; the Financial Software sector also saw a high volume of financings
- Financial Software companies trade at the highest average revenue multiple at 11.5x EV/ ’19E Revenue compared to other software; the Technical Applications sector trades at the highest average EBITDA multiple at 31.7x EV/ ’19E EBITDA compared to other software
- Security software had the highest average 2019E/2018A revenue growth at 30% compared to other software
- Development and Operations Management software stock performance outperformed other software sectors with LTM growth over 33%
- Select Q2 ’19 Global Software Sector Active Investors:
- Accel
- Andreessen Horowitz
- Bain Capital Ventures
- Battery Ventures
- Index Ventures
- Insight Partners
- Intel Capital
- Kleiner Perkins
- NEA
- Norwest Venture Partners
- Tiger Global Management
- Vista Equity Partners
- Select Q2 ’19 Global Software Sector Active Strategic Buyers:
- Constellation Software Inc.
- Descartes
- E2open
- J2 Global
- Mastercard
- Medallia
- Microsoft
- Palo Alto Networks
- Salesforce
- SolarWinds
- Upland