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Q3 2020
Sector
Update
Software
Important disclosures appear at the back of this report
GP Bullhound LLP is authorized and regulated by the Financial Conduct Authority
GP Bullhound Inc is a member of FINRA
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GP Bullhound is a leading technology advisory and investment firm highly focused in the SaaS sector.
Our quarterly report provides quantitative insights into public and private
market valuations across the transaction spectrum and qualitative
insights into company business models, technology and trends. We
feature many of the leading SaaS companies and CEOs across
interesting sub-sectors.
Q3 has been a rollercoaster in a year unique in terms of the challenges
for people in their private and professional lives. The pandemic continues
to cause uncertainty across geographies but has reinforced the need for
digital transformation across the board. Political uncertainty in the US has
caused further chaos in the public markets, as it is unclear who will
emerge victorious. Amid the turmoil, clear winners and losers have
emerged in the 'new' economy that now exists, with cloud-based
software solutions being the most obvious winner.
Nowhere is this more evident than in the public markets. The GPB SaaS
Index has grown impressively, trading at all-time highs versus Q1 and Q2
2020. There has also been enormous appetite for software IPOs, with a
host of private companies tapping into this market sentiment and listing
for the first time in Q3. Snowflake, Palantir, Asana and many more have
gone public in a combination of traditional IPOs and direct listings,
gaining access to capital and providing liquidity to longstanding
shareholders. In the private markets, strategic M&A for the highest quality
assets remains robust, with premium valuations holding up; however,
assets that are not highly strategic are staying in market longer.
Going into Q4, appetite for M&A is increasing as strategic acquirers have
shored up their own balance sheets, and PE backers have fortified their
portcos and are ready to