Founder advisory view: 2026 will reward companies that look diligence-ready, recurring, automation-enabled and strategically scarce.
Rate visibility is improving, seller price expectations are resetting, and buyers are closing capability gaps in AI, cybersecurity and connectivity. This is a quality-led re-opening — not a broad beta rebound. Mid-market deal size limits regulatory friction while still delivering strategic lift, making $15M–$500M the most actionable segment this cycle.
Market context — global mid-market TMT
$239B
Mid-market deal value 2025
vs $207B in 2024
+15% / +3%
Value growth / volume growth YoY
Quality over quantity signal
$1.6T
Global TMT deal value 2025
+71% YoY; volume fell 4%
27%
TMT share of all mid-market deals
Up from 26% in 2024
ILLUM mid-market focus — $15M–$500M
60%
PE share of mid-market TMT deal count
vs 34% across all mid-market sectors
80% / 77%
Software share of volume / value
Services = 20% vol / 23% value
+7%
Cross-border mid-market value YoY
$87.5B despite macro headwinds
Mid-Market Value vs. Volume — 5-Year Trend
Value ($B)
Deal count
Indicative Multiple Bands — Normalized Profitability Basis
Software: EV/ARR · Services: EV/EBITDA
Premium mid-market assets; ranges reflect well-positioned targets
Multiples are indicative; actual pricing depends on growth rate, NRR, market position and deal structure. Services firms proving software-like economics can close the valuation gap materially.
Six Strategic Themes Driving Buyer Conviction in 2026
AI / Data
Compute, data pipelines, workflow automation and governance tooling command top-of-market premiums as AI becomes a core diligence criterion.
Cyber
Identity, threat exposure management and cloud security — especially in regulated verticals — attract consistent PE and strategic buyer interest.
Telecom Infra
Fiber densification, altnet consolidation and edge compute accelerating across Europe and North America as operators rationalize network assets.
Media / IP
Monetizable IP and platform-native distribution economics in demand; broad content aggregation without engaged audiences is not.
PE Roll-ups
Platform build velocity favors recurring-revenue targets with integration-ready finance data — PE buyout values rose 24% YoY to $123B in mid-market TMT.
Cross-Border
North America anchors at 45–46% of mid-market activity; cross-border deal value up 7% YoY — strategic imperative outweighing macro caution.
Software vs. Services — Where the Valuation Spread Opens
| Dimension |
Software / Platform |
IT / Business Services |
| Buyer logic |
Own the workflow, data layer or vertical application |
Acquire client access, delivery capacity and managed revenue |
| Premium trigger |
AI embedded, high NRR, vertical depth, clean data rights |
Automation-enabled delivery, proprietary IP, cloud/cyber specialization |
| Discount trigger |
Thin IP · high churn · low gross margin |
Body-shop mix · project volatility · customer concentration |