The SaaSpocalypse Fire Sale Is Here. Are You Buying?

Founders, investors, and analysts debate the winners and losers of the coming M&A boom. Get ready for the SaaSquisitions.

BY BRIAN CONTRERAS, STAFF WRITER @_B_CONTRERAS_

SaaSpocolypse. Photo illustration: Nathan Bajar

Early last month, a week into the software sector downtown that had already come to be known as the “SaaSpocalypse,” Morgan Stanley’s head of global tech M&A issued a warning: the public market sell-off could complicate acquisitions, which were otherwise enjoying a post-pandemic upswing.

“Everything’s down, and there really hasn’t been a very thoughtful, detail‑oriented approach to sorting through who [the] winners and losers are,” Morgan Stanley’s Wally Cheng told Reuters, adding that even if an acquisition target’s fundamentals were unchanged, plummeting valuations would likely add friction to sales.

But what if the decline in software-as-a-service valuations—triggered by concerns that they could soon be replaced by AI alternatives—is actually the catalyst needed to trigger an explosion in tech M&A? After all, lowered prices could offer acquisitive management teams and investors a chance to scoop up undervalued assets, while the looming threat of automation may leave some SaaS founders eager to get out while they still can.

“We think it’s likely that M&A will pick up in the second half of 2026 and into 2027,” says Sean Barrett, founder and managing partner at the investment management firm Counter Global. “SaaS companies that have maintained high growth and decent trading multiples will be able to pick off smaller companies at accretive multiples; we would also expect private equity to get more active as credit markets and the ‘death of SaaS’ narrative calm down a bit.”

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