The SaaS reckoning reaches private equity | CTech

▤ Summary

Private-equity funds that built large portfolios of SaaS companies now face a reckoning as AI-driven automation and falling stock multiples erode the per-seat subscription economics. The piece highlights sharply lower valuation and revenue multiples, rising distressed debt linked to software assets, and the risk of significant write-downs for funds. It warns that funds may struggle to exit holdings or raise new vehicles, and that investment appetite for software — including in Israeli high-tech — is likely to decline. The article argues SaaS vendors will need to shift toward outcome-based pricing and that some companies may choose to build features in-house using AI, reducing vendor demand.

▦ Linked Companies

Sapiens International

$500M to $1B

PitchBook

$50M to $100M