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In Q1 2021, M&A deal activity and private financing activity continued to grow whilst software performance in the public markets stagnated

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Software Sector Report Q1 2021

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EXECUTIVE SUMMARY
»In Q1 2021, M&A deal activity and private financing activity continued to grow whilst software performance in the public markets stagnated
–Software sector performed below 2020 trends in Q1, with the IGV tech-software index underperforming the S&P 500 by 9.4%
–Sales & Marketing has outperformed the other software segments, achieving 124%LTM growth as of Q1 2021
»Q1 ’21 saw ~$40Bn in financing deal value and ~$86Bn in M&A deal value
-424financings, 100.9%higher than Q1 ‘20
-458M&A transactions, 17.7% higher than Q1 ’20
»Significant M&A activity in Q1 includes acquisitions in the Security sector: Okta’s $6.5Bnacquisition of Auth0 and STG Partners’ $4.0Bn acquisition of McAfee’s enterprise business
»Financial software had some of the largest financing deals in Q1 ‘21 led by the $600MM financing of Stripe and $1,290MM financing of Klarna
»Overall outlook in software growth remains healthy, particularly in the private markets

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