ILLUM Pulse
M&A Intelligence Platform
H1 2026 · Intelligence Report
Software & Technology M&A
For Authorised Distribution Only
Software & Technology M&A · H1 2026
The market
has split
in two.
$19.9B in disclosed deal value. One pattern dominates: AI-native businesses command 10–15x revenue. Everything else fights for 1–3x. The gap is no longer theoretical — it is measurable, consistent, and widening.
$19.9B
Disclosed Deal Value
H1 2026 · confirmed primary sources
15.0x
Highest Confirmed Multiple
AI-native Shopify SaaS · $4M ARR
0.4x
Lowest Confirmed Multiple
Mature loyalty SaaS · no AI narrative
109x
Multiple Spread Floor → Ceiling
Same asset class · same half-year
Highest Confirmed Multiple · H1 2026
15.0x
A $4M ARR Shopify SaaS company sold for $60M — 15x revenue and 60x EBITDA. AI-native architecture, ecosystem exclusivity and hypergrowth combine to push the multiple to an extreme. It is not a floor. It is a proof of what the category ceiling looks like in 2026.
Dotdigital → Alia Software · Mar 2026 · $60M confirmed
Lowest Confirmed Multiple · H1 2026
0.4x
A cloud loyalty platform with $50M in revenue sold for $20M. No AI relevance. No growth story. No switching costs. Sub-1x EV/Revenue is no longer a theoretical risk — it is a confirmed 2026 outcome for businesses that cannot answer the AI question.
Capillary → Session M · Feb 2026 · $20M confirmed
Largest Transaction · H1 2026
$6.4B
Hg Capital and General Atlantic took OneStream private at exactly 10x NTM revenue. AI-powered financial forecasting, growing at 20%+, Rule of 40 above 45. At this growth rate and margin profile, 10x is not a premium — it is the rational price.
Hg Capital / General Atlantic → OneStream · Jan 2026 · 10.0x EV/Revenue confirmed
The Data Moat Premium
5.2x
Ookla runs 10 million daily speed tests across 180 countries. Twenty years of proprietary network performance data that no AI can replicate. Accenture paid 5.2x revenue — not for an AI story, but for an irreplaceable data asset that is defensible precisely because it predates AI.
Accenture → Ookla · Mar 2026 · $1.2B confirmed · 5.2x EV/Revenue confirmed
Cyber Platform Spend · Single Quarter
$1.16B
CrowdStrike spent $1.16 billion on identity and browser security in one quarter. Machine and AI identities now outnumber human identities 50:1 in the enterprise. Browser is the #1 attack vector. Platform consolidation is the dominant M&A theme of H1 2026.
CrowdStrike → SGNL.ai ($740M) + Seraphic ($420M) · Q1 2026 · both confirmed
Distressed BI Exit · Public Company
$400M
Domo's stock fell from $90 to under $5. 2,400+ enterprise customers and a cloud analytics platform sold for $400M. Flat growth and no AI differentiation converted a once-celebrated public company into a distressed asset regardless of customer scale.
Progress Software → Domo · Jul 2026 · $400M confirmed · NASDAQ: DOMO taken private
ILLUM Pulse · H1 2026 M&A Intelligence Report
Page 2 of 3
02 · Valuation Intelligence
Where the Market Is Pricing Software in 2026
Private market EV/Revenue multiples across confirmed transactions
EV/Revenue Multiple Spectrum
Each bar represents a confirmed private market transaction · H1 2026
Distressed / no AI narrative
Legacy / mature carve-out
Quality SaaS with defensible moat
AI-native + ecosystem exclusive
Session M
Cloud loyalty platform · $50M revenue
0.4x
Urgently
Roadside assistance SaaS · raised $100M+
0.55x
Vertica Systems
Enterprise analytics database · OpenText carve-out
Legacy database · distressed seller
1.9x
Synchronoss
Telecom messaging & cloud platform
Telecom SaaS · stable recurring
2.0x
KORE Group
Industrial IoT connectivity platform
Industrial IoT · strong recurring revenue
3.5x
Ookla (Speedtest.net)
Network intelligence · 10M daily tests · $1.2B
Proprietary data moat · 20yr network intelligence dataset
5.2x
OneStream Inc
AI financial forecasting / EPM · $6.4B
AI-native EPM · 20%+ growth · Rule of 40 >45
$6.4B
10.0x
Alia Software
AI-native Shopify popup SaaS · $4M ARR
AI-native · Shopify ecosystem exclusive · 60x EBITDA confirmed
$60M
15.0x
To access 10x+ you need all three
AI-native architecture — not AI-adjacent or AI-enabled. 20%+ revenue growth. Rule of 40 above 40. Missing any single one of the three returns you to the 3–6x bracket. The conjunction matters as much as the individual criteria.
2.8x is where quality starts — not where it ends
The private market median is 2.8x for a quality, profitable software business. This is the starting assumption — adjusted up for data moats, ecosystem lock-in and clearances; adjusted down for flat growth, T&M revenue and no AI answer.
Sub-1x is confirmed — not theoretical
Two transactions in H1 2026 — Session M at 0.4x and Urgently at 0.55x — confirm that SaaS businesses without a growth story or AI narrative can and do exit below 1x revenue. The window for exits above 1x is narrowing for this cohort.
Proprietary & Confidential
ILLUM Strategic Partners
ILLUM Pulse · H1 2026 M&A Intelligence Report
Page 3 of 3
03 · GovTech & Federal IT
A Different Valuation Universe
Federal IT M&A operates on fundamentally different rules — EBITDA-led, clearance-driven, contract-anchored
Recent GovTech Transactions — Confirmed EVs
Ricardo Defense (eng.)
1.0x
1901 Group (Leidos)
1.65x
EverWatch — IC/SIGINT
1.75x
ManTech — PE Take-Private
1.68x
All EVs confirmed from primary sources · multiples derived from ILLUM GovTech database
ILLUM GovTech Valuation Framework
Commodity IT (T&M)0.6–1.0x
Federal IT (stable contracts)1.0–1.8x
Federal digital / Agile1.4–2.2x
Federal cybersecurity1.5–2.5x
IC / classified software2.0–4.0x
Defense eng. / specialized SW~1.0x rev = ~8–10x EBITDA
SLED vertical software3–6x
✅ Confirmed Pattern — Defense Engineering
Parsons/CTI ($89M) and Ricardo Defense ($85M) confirmed at exactly 1.0x revenue = 8–10x EBITDA — two independent data points at the same intersection. Defense engineering software is priced on EBITDA. At ~10% margins, EV equals Revenue. This is the category anchor.
Critical Difference: GovTech vs Commercial Software
Commercial Software
GovTech & Federal IT
Valuation Basis
EV/NTM Revenue — growth rate is the primary driver. ARR growth and Rule of 40 determine the bracket.
Valuation Basis
EV/EBITDA — cash generation drives the multiple. Contract type sets the ceiling before any other factor.
Premium Drivers
AI-native architecture · 20%+ growth · Rule of 40 >40 · proprietary data moat · ecosystem exclusivity
Premium Drivers
TS-SCI clearances · sole-source contract vehicles · IC customer base · active incumbent with option years
Discount Factors
No AI answer · flat growth · legacy architecture · no switching costs · VC distress situation
Discount Factors
T&M-heavy revenue · customer concentration · SB vehicle graduation risk · recompete within 12 months
The One Rule That Applies to Both Universes
Whether the buyer is a Silicon Valley strategic or a defense PE firm, the same principle holds: the multiple follows the quality of the recurring revenue, not the size of the revenue base. Session M had $50M in revenue and sold for 0.4x. Parsons paid $89M for CTI, which had $89M in revenue. The difference is the defensibility of the customer relationship and the trajectory of the business — not what is on the income statement. In commercial software, AI-native architecture is the new proxy for defensibility. In federal IT, clearance level and contract vehicle incumbency serve exactly the same function.
04 · Conclusions & Outlook
What This Means for H2 2026
2.8x
Private market median
The calibrated starting point for any quality, profitable private software business. Adjust up for data moats, ecosystem lock-in and clearances. Adjust down for flat growth and no AI narrative.
10x+
The AI-native threshold
Requires all three: genuine AI-native architecture, 20%+ growth, Rule of 40 above 40. Missing any one drops back to 3–6x. All three together is a narrow but well-rewarded set of businesses.
<1x
The distressed floor is confirmed
Sub-1x is a measured 2026 outcome. Flat growth plus no AI narrative is a confirmed path to distressed exits regardless of revenue scale or customer base size.
Agentic AI is the defining acquisition category of 2026
Agentic search ($275M), agentic security ($400M) and agentic CLM ($900M) all transacted in Q1 2026. The category is real and buyers are paying now. H2 will determine which become platform pillars and which become features inside larger acquisitions.
Cybersecurity platformisation is accelerating at scale
$1.16B in identity and browser security acquisitions from one buyer in one quarter. Platform consolidation in cybersecurity is the dominant M&A theme — buyers are acquiring entire sub-categories, not just capabilities, at a pace that will define the category for a decade.
Proprietary data moats are the best AI hedge available
Ookla at 5.2x — not for an AI story, but for 20 years of network data no AI can replicate without 20 years of observations. Longitudinal proprietary datasets are commanding premiums independent of whether a company has positioned as AI-native.
GovTech buyer engagement has returned in 2026
After a significant volume decline in H1 2025 driven by budget disruption, our data shows active buyer engagement returning. Parsons made three acquisitions in 18 months totalling over $500M. Mission-enabling AI and cyber buyers are moving regardless of budget environment uncertainty.
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