KPMG Technology Deal Flash – Edition Q1/2025

Each quarter, we aim to keep you up to date with a concise review of the M&A and fundraising activity in the technology sector in GSA. At the same time, we look at capital market activity, valuation levels and deep dive into relevant sector issues with insights from our KPMG experts.
In this issue:

• Mergers and acquisitions: This quarter, the Tech M&A market softened, with a 14% decrease in deal count compared to the previous quarter, but an 18% increase from 1Q24. Early momentum was overshadowed by political uncertainties, yet demand for AI, cybersecurity, and SaaS solutions remained strong.
• Funding activity: In the first quarter of 2025, the GSA region saw a slight decline of 3% in venture capital deal volume q-o-q, which can be attributed to cautious investor sentiment amid uncertainty. Despite this, funding value surged by 26% q-o-q, driven by growing confidence in tech ventures and ECB interest rate cuts.
• Valuation levels: During the quarter, valuation multiples for tech companies declined across most sub-sectors, reflecting market adjustments and political uncertainties. Although some sub-sectors saw a slight rebound in valuations at the end of 2024, overall valuations continued to decrease up to the end of 1Q25.
• KPMG Insights: In today's rapidly digitalizing world, payroll has shifted from a traditional function to a key component in compliance management, risk mitigation, and strategic corporate governance. KPMG's “Payroll Excellence” report highlights the necessity for businesses to adapt their payroll processes to address complex regulatory demands and evolving employee expectations.

The KPMG Technology Deal Flash is published quarterly and highlights current M&A and financing activities in the technology sector in the GSA region. Subscribe to our newsletter to make sure you never miss an issue.