Market performance: valuation pressures persist

Stocks continue to suffer in April, with B2B software stocks being down 5.7% and S&P500 and Nasdaq respectively falling 5.1% and 6.1%.

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• B2B software stocks fell -5.7% in April, in line with broader indices (S&P 500 -5.1%, Nasdaq -6.1%)

• YTD decline now totals -8.8%, reflecting growing caution across investors

• EV/Sales multiples hit a low of 5.0x, lower than pandemic-era troughs, before slightly rebounding to 5.5x

• Valuation compression is most pronounced for mid-growth companies (10–20% revenue growth), down -14.4% YTD

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B2B software EV/Sales NTM valuations dropped ~7% in April to 5.5x, reaching a low point of 5.0x, marginally lower than levels seen during the COVID-19 period in 2020.

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Macroeconomic shifts: policy divergence & tariff tensions

• U.S. prices declined month-over-month for the first time since June 2024

• The Federal Reserve held rates steady, while the ECB enacted its 7th rate cut, lowering rates to 2.25%

• The U.S. announced broad-based tariffs (10–125%), triggering valuation stress with China tariffs remaining in place despite a 90-day negotiation pause

Tariff uncertainty may delay enterprise decision-making, echoing the 2020–22 cycle of spending review and optimization.

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Deal flow: volume holds, mega deals drive averages

Highlights include:

• Fortnox (€5.5B valuation, 23x EV/Sales)

• Didomi (€72M round from Marlin Equity for GRC & privacy tech)

• SmartTrade (TA Associates buyout following Hg exit)

• In venture capital, OpenAI’s €37B round led a 47% quarterly surge in VC deal value

• CoreWeave ($1.5bn IPO) and Plaid ($575M round, 18.3x EV/Sales)

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A market in transition: what to watch

• Revenue growth has slowed down (~10.1% avg. NTM), while FCF margins are increasing (now at 17.1% NTM average)

• Investors now pay a higher premium for growth than for profitability  

• Rule of 40 companies (high growth & margin) trade at significantly higher multiples (up to 29.8x EV/Sales)

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