GLOBAL SOFTWARE MARKET PERSPECTIVES Q4 2022
Q4 2022 insights into Software.
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25 January 2023 - GP Bullhound publishes qualitative insights into broader Software trends and public and private valuations across the transaction spectrum, and interviews with today’s leaders transforming the sector.

Jonathan Cantwell, Partner & Head of Software at GP Bullhound, said: “In the latest report, we have highlighted key trends that have dominated Q4 2022. ChatGPT drove accessibility into previously difficult to penetrate markets, allowing for the democratisation of content, regardless of S&M budget; SaaS businesses are providing more customisable pricing models as customers lose interest in bundled offerings; the business intelligence ecosystem continues to develop and scale; customer experience software is notably resilient in the face of uncertain economic conditions as it allows brands to differentiate and win consumer dollars.”

Matt Stamp, Partner in the Software team at GP Bullhound, commented: “While global dealmaking pulled back from a strong H1, Q4 saw a record level of quarterly buy-out activity as investors took advantage of comparatively cheap public markets. Both M&A and fundraising were characterised by trends we expect to continue with a focus on resilience, unit economics and profitability. Given attractive secular dynamics, we see significant capital continuing to be available to drive further M&A, buy-outs and P2Ps in 2023.”

What’s trending this quarter in Software?

Current headwinds impacting valuations

  • Private market valuations have taken a lesser hit, with focus shifted to gross margin and gross revenue retention
  • Strong secular growth continues to underpin the long-term value of the sector, which is likely to reach $716bn by 2028

ChatGPT headlines generative AI vertical

  • ChatGPT is driving accessibility into previously difficult to penetrate markets
  • ChatGPT will allow for the democratisation of content, regardless of S&M budget
  • The Generative AI market size is likely to reach $110.8bn by 2030

Business and end-to-end (CX) consumer intelligences

  • Business intelligence is gaining popularity through easy-to-use self service tools, and citizen developers are another major driver of rapid growth in this market – the ecosystem continues to develop and scale, set to reach $43bn by 2028
  • CX software is notably resilient in the face of uncertain economic conditions as it allows brands to differentiate and win consumer dollars; brands want fewer software solutions that have integrated end-to-end solutions, in CX that means strategic insights down to implementation in one platform

Enquiries
For any enquiries, please contact:
Jonathan Cantwell, Partner (US), at [email protected]
Matt Stamp, Partner (Europe), at [email protected]

About GP Bullhound
GP Bullhound is a leading technology advisory and investment firm, providing transaction advice and capital to the world’s entrepreneurs and founders. Founded in 1999 in London and Menlo Park, the firm today has 13 offices spanning Europe, the US and Asia. For more information, please visit www.gpbullhound.com.


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Region
Global
Sector
Software