What actually happened
In early 2026, investors started asking a blunt question: if an AI agent can do the work, why pay for the software? Between early January and late March, the S&P 500 software index fell 27% (Carta).
Private markets followed. Buyout funds marked down their US software holdings by 8.9% from Q4 2025 to Q1 2026, while valuations in the rest of the market kept rising (Carta).
Headlines named it the SaaSpocalypse. If you own a software company, you've probably asked the obvious question since: did my exit just get cancelled?
The answer is in October's deals
Two deals this month say no.
Hexagon buys Rocscience
On 9 October, Hexagon agreed to buy Rocscience, a Toronto geotechnical software company, from private equity firm TA Associates, its founders and management (Hexagon). The price: a US$535 million enterprise value, cash-free and debt-free.
Hexagon says Rocscience expects revenue approaching US$50 million this year, with recurring revenue above 80% of that and EBITAC margins above 40%. Its stated reason for buying: connect Rocscience's simulation software to Hexagon's own monitoring sensors, so live site data can recalibrate engineering models.
Do the arithmetic and that's roughly 11 times this year's expected revenue. Over the same months, the median listed SaaS company traded at about 3 times next year's revenue (Kroll). Different measures, and no promise for anyone else. But it's a long way from "software is dead".
GTCR and Elliott take CCC private
On 15 October, CCC Intelligent Solutions, a Nasdaq-listed software company for the insurance and auto-claims industry, agreed to be taken private by a consortium led by GTCR, with Elliott Investment Management participating (CCC). All cash, about US$6.1 billion in enterprise value, US$7.75 a share. That's roughly a 44% premium to the share price before sale reports surfaced in July. Closing is expected in the first quarter of 2027.
CCC isn't a founder-owned business. It matters for a different reason: private equity is still writing very large cheques for software it believes in.
| Rocscience | CCC Intelligent Solutions | |
|---|---|---|
| Buyer | Hexagon (strategic) | GTCR-led consortium with Elliott (private equity) |
| Announced | 9 October 2026 | 15 October 2026 |
| Value | US$535m enterprise value | About US$6.1bn enterprise value |
| Sellers | TA Associates, founders, management | Public shareholders |
| Expected close | Q4 2026 | Q1 2027 |
What changed is who's buying, and what they check
Strategic acquirers, companies buying a product that makes their own stronger, made up 76% of software deals in Q1 2026, up from 71% across 2025 (Kroll).
Investors have also changed what they check. Carta describes a shift toward tougher diligence on customer concentration, churn and pricing power, instead of paying a premium for revenue growth alone. It calls AI a dividing line for PE-backed software, not a death knell (Carta).
The share market tells you what a fund manager will pay for a listed stock this week. It doesn't tell you what the buyer who needs your product will pay.
What it means if you own a software company
- Your likeliest buyer is a strategic. Hexagon didn't buy Rocscience for its multiple. It bought a missing piece. List the companies whose product gets better with yours in it. Our acquirer pages are a start.
- Profit is back in fashion. Expect hard questions on churn, customer concentration and pricing. Know your answers before a buyer asks.
- Have a straight answer on AI. Not "we added a chatbot". Why does AI make your product harder to replace, not easier? If you can't answer, a buyer's diligence team will answer for you.
- Don't price yourself off the index. Comps tell you what the last founder settled for. Public SaaS multiples tell you what the share market thinks this week. Neither is your number. For how a headline price is built, start with enterprise value.
- An approach this year isn't a fluke. Buyers with a reason are still buying. If one has emailed you, read what to do when a firm approaches you before you take the call.
The honest bit
Nobody knows where software valuations go next, including us. The market figures here cover the first half of 2026; full third-quarter numbers weren't public when we wrote this. Rocscience's revenue and margin figures are the buyer's own expectations, not audited results. Two deals don't make a market.
What the evidence does show: buyers with a strategic reason kept buying through the sell-off, and the business that was paid well in October was profitable, recurring and hard to replace. None of this is financial advice.
Questions founders are asking
The nickname for the 2026 fall in software company valuations, driven by fears that AI agents will do work people now pay software subscriptions for. The S&P 500 software index fell 27% between early January and late March 2026.
It depends on your business more than the index. Profitable products with recurring revenue, low churn and a clear AI answer are still selling: Rocscience is October's example. If growth is slow, margins are thin and your product would be easy to rebuild with AI, the honest answer may be to fix that first and start buyer conversations early.
Yes, more selectively. Buyout funds marked down US software holdings by 8.9% in Q1 2026, and diligence now leans hard on churn, concentration and pricing power. In October, a GTCR-led consortium agreed to take CCC private for about US$6.1 billion.
Mostly strategics: 76% of software deals in Q1 2026, according to Kroll. Financial buyers such as private equity make up the rest. Our acquirer pages show who is buying, what they own and how they approach founders.
Waiting is a bet on the market. Getting to know the buyers who need your product isn't. That's why we start early.
The truth, first.