01 · Research
Abstract
This working paper examines the influence of AI classification on valuation multiples in the technology M&A market from 2022 to 2025. The study is motivated by two simultaneous market forces: a broad-based rebound in global M&A activity following a prolonged contraction, and an unprecedented surge in AI-related capital formation.
We construct an illustrative dataset of 80 to 150 transactions from publicly available sources, including SEC filings, press releases, and market data from S&P, Capital IQ, and PitchBook. Transactions are segmented into three categories: AI-native companies, AI-enabled incumbents, and non-AI SaaS controls.
The methodology employs descriptive statistics, a comparative analysis of median and mean valuation multiples (EV/Revenue and EV/EBITDA), and an OLS regression to model the effects of revenue growth rate, EBITDA margin, and AI classification on EV/Revenue multiples.
The regression is specified as:
EV/Revenue = β0 + β1(Growth) + β2(EBITDA Margin) + β3(AI Classification) + ε
Results indicate that AI classification is a statistically significant predictor of EV/Revenue multiples after controlling for growth and profitability. AI-native companies command a material premium over non-AI SaaS peers. The premium is not explained by profitability alone: AI classification is an independent and statistically significant variable.
Key Findings
- 01Incumbent Re-rating Is UnderwayAI-enabled incumbents, established software businesses that have integrated AI into existing products, are being valued on a forward-trajectory basis. Acquirers are pricing in anticipated margin expansion and competitive moat reinforcement, not just current financials.
- 02Non-AI SaaS Faces Structural Multiple CompressionAs capital concentrates in AI-classified assets, non-AI SaaS businesses face a bifurcated market. The multiple gap between AI-native and non-AI SaaS has widened consistently from 2022 to 2025 and shows no sign of reversal.
- 03The Rebound Is AI-DrivenThe 2024 to 2025 M&A rebound is not uniform. Deal volume and premium pricing are concentrated in AI-adjacent transactions. Non-AI SaaS deal flow has recovered more slowly, with buyers applying greater scrutiny to growth sustainability and competitive positioning.
About the Author
Joash Boyton is the Founder and Managing Director of Acquiry. He advises on buy-side and sell-side digital M&A mandates ranging from USD $1M to $500M across SaaS, fintech, payments, gaming, digital media, and blockchain. He operates across the US, UK, UAE, Singapore, and Australian markets.
View full profile at joashboyton.com (opens in a new tab)
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About the analyst
Joash Boyton
Founder and Managing Director, Acquiry · Melbourne, Australia · Global coverage
Joash Boyton is the Founder and Managing Director of Acquiry, a specialist M&A advisory firm focused on the acquisition and sale of businesses. He executes buy-side and sell-side mandates from USD $1M to $500M across technology, SaaS, fintech, payments, gaming, blockchain and emerging verticals, and is not limited to them. Any sector, any market.