It’s another year and another great report on the state of capital in SMB SaaS software from Surepath Capital Partners.
This report identifies which verticals are attracting the most Venture Capital funds, trends among SMB software company acquisitions, billion dollar deals and more. Here are just a few insights from the 2019 report:
- The SMB software market continues to grow rapidly: total deal value increased 39% YoY.
- Rise of the mega-round: The number of $100M+ VC deals tripled.
- VC’s can’t get enough of Restaurant Tech, with funding reaching an all-time high of ~$2B.
- Total VC capital raised for the Legal vertical grew over 200%.
- A market sell-off in December 2018 caused significant in-year gains for public markets.
- IPO activity increased, though with mixed performance.
Average investment deal size in SMB SaaS by type
SMB SaaS continues to see significant capital investment, primarily in early stage investment though there have been significant exits in 2019.
2019 Top PE SMB Software Deals
Private equity, led by Vista, has been making a lot of major acquisitions in the SMB SaaS sector, showing healthy valuations and exits are happening outside of the IPO market.
2019 top M&A SMB software deals
Beyond private equity, there have been significant merges and acquisitions. Most notably, First Data was rolled up with Fiserv, creating a fintech behemoth with exciting prospects for the future. Shopify has also been on an acquisition bender, making 3 acquisitions last year.
2019 top VC SMB software deals
Venture capital continues to write big checks across SMB SaaS, which signals faith by investors that the industry will continue to post significant growth year over year.
2019 most active SMB software VCs
Accel, TigerGlobal and Battery Ventures continue to lead the investments in SMB SaaS, with many other firms showing an investment focus on the small business software industry.