A comprehensive update on B2B software and IT services trends, including market performance, valuation dynamics, deal activity, and key names to watch
Written by :
Matthew Cortez
Miguel Tang
March 11, 2026
November was a difficult month for B2B software stocks. The B2B Software Universe declined 4.9%, continuing to underperform major indices, with the S&P 500 flat and the Nasdaq down 1.5%. Year-to-date, the sector has now entered negative territory at –2.3%, significantly lagging the S&P 500 (+16.4%) and the Nasdaq (+21.0%).
Sector performance remained uneven. Strength in Financial Services (+3%) provided some support, but this was outweighed by sharp declines across key horizontal and infrastructure categories, including Cybersecurity (–8%), Payment & eCommerce (–7%), and Infrastructure Software (–7%).
Macro visibility was also limited in November: no official October US CPI print was released due to the government shutdown. As a result, the Federal Reserve maintained its current policy stance, keeping the federal funds target range unchanged at 3.75%–4.00%. The European Central Bank likewise kept rates steady at 2.00%, citing weak growth and persistent inflation risks.
Valuations declined meaningfully in November, reflecting both equity performance and macro uncertainty.
Year-to-date, EV/Sales multiples are down ~14%, falling from 6.4x to 5.5x. Despite this compression, Rule of 40 companies continue to trade at a premium, typically at or above 6.4x EV/Sales, underscoring persistent investor preference for efficiency and free cash flow generation.
Q4 2025 has seen robust M&A activity, with corporate and private equity deal values nearing €12 billion. Venture capital activity accelerated as well, with €19 billion deployed year-to-date, surpassing 2024 levels, driven especially by large AI-related transactions.
While most mega AI deals occurred earlier in the year, Q4 still delivered several notable transactions:
Both corporate and PE deal momentum remains broad-based, with early signs of continued activity into Q4 despite a historically quieter seasonal period.
The IPO market continues to reopen gradually. Several companies delivered solid trading performance post-listing, though visibility remains uncertain. Investor appetite is strongest for high-growth, profitable, AI-adjacent segments.
With no October inflation data available in the US, monetary policy visibility remains constrained. The Fed and ECB have paused further tightening, but lingering inflation risks and fragile global growth continue to weigh on investor sentiment.
Valuation dispersion remains wide, with Rule-of-40 names and AI-infrastructure-exposed players maintaining premiums relative to horizontal productivity software.
The B2B software sector delivered a strong Q3 earnings season, with:
However, market reactions were mixed, reflecting sensitivity to subtle changes in growth trajectories.
Key highlights:
Overall, AI-ready infrastructure, supply chain digitization, and operational technology remain bright spots, while horizontal categories face heightened competitive pressure.
Dedale Intelligence’s market sessions provide a curated, data-driven lens into what’s really happening in B2B software, from valuations and macro trends to segment-level dynamics and investment signals.
Contact us to learn more about membership and access the full presentation.
Get started
Dedale is growing fast and we are continuously looking to widen our reach in the ecosystem. Let's connect!
Members
Join our Community of Industry Veterans that we collaborate with to conduct deep research
Join the community
Investors, Corporates, and M&A Advisors
Learn more about how collaborating with Dedale Intelligence could enhance your intelligence generation efforts
Request an introduction
Talents
We are looking for smart, hungry, humble individuals to join our fast growing team worldwide!
Join the team
%20(1).jpg)
.jpg)
.avif)
.avif)
.avif)
.avif)
.avif)