Private equity revives software buyouts as valuations begin to recover

The software sector, once battered by the so-called SaaSpocalypse, is witnessing a resurgence of private-equity interest as firms accept lower but more realistic valuations. Bending Spoons' acquisition of Airtable for just north of $1 billion—down from a $12 billion high—served as an early signal of this shift. Simultaneously, PayPal is in advanced negotiations with Stripe and Advent that could value the payments processor at roughly $53 billion, a fraction of its earlier worth, while Workday is discussing a massive leveraged buyout with Silver Lake, prompting a rally in software shares.

Buyout specialists such as Thoma Bravo and Hellman & Friedman are positioning to restructure and scale these companies away from public-market scrutiny. Nonetheless, financing remains uncertain, with sovereign wealth funds and private credit funds facing constraints. The author cautions that, although the market bottom may be near, further risks could still emerge.