SaaS Industry Update: February 2026
The SaaS market is entering 2026 in a reset environment, not a collapse. Public multiples have repriced, scrutiny has increased, and AI is reshaping
competitive moats. In our February 2026 SaaS Industry Update, we outline what is changing and where disciplined operators can still create value.
Key Highlights:
-
M&A activity rebounded in 2025, with global deal value reaching approximately $3.0 trillion, up 31% year over year, and more than 900 deals over $500 million signaling renewed buyer confidence.
-
Vertical AI is scaling quickly. Early AI native platforms are growing near 400% year over year with roughly 65% gross margins, positioning AI as operating infrastructure rather than a feature add on.
-
Valuation is tied to fundamentals. Sustained growth, strong retention, and rule of 40 momentum remain the drivers of premium outcomes.
-
The market is quality first. Median public SaaS revenue multiples have stabilized well below prior peaks, and only about 17% of the public SaaS universe meets the Rule of 40 benchmark.
If you or someone you know have questions regarding anything discussed, or the general SaaS marketplace, please feel free to reach out to Brad Johnson, Managing Director of Founders’ Technology & Business Services Group.