The B2B software sector continued its correction in April 2025, shaped by macroeconomic uncertainty, shifting investor sentiment, and divergent growth paths across segments
Written by :
Julien Fouché
Benjamin Forlani
July 25, 2025
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%.
Source: Capital IQ as of April 24th, 2025, Dedale analysis
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
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.
Source: Capital IQ as of April 24th, 2025, Dedale analysis
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.
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)
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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