A renewed sense of optimism is developing in the M&A market. Buyer interest levels are higher than we have seen in a long time, both among strategics and private equity firms. For high-quality assets, e.g., those that have continued to perform well despite the difficult market conditions, we see particularly high demand and competition among biding parties, resulting in a material valuation premium for those assets relative to peers.

It is not uncommon for buyers with strong conviction to move quickly and outbid slower-moving parties, while a high proportion of strategics have mandated buy-side advisors to help them source and screen opportunities.

​The momentum is underpinned by a belief that the difficult macro conditions of the last two years are coming to an end. This view is supported both by the cautious lowering of interest rates in major economies as well as by improving company KPIs. Technological innovation is also a major M&A driver.

The last couple of years have been difficult for most businesses in the HR Tech and broader Work Tech ecosystem. However, it appears we have reached yet another inflection point. 

A new wave of innovation is spurring both customer demand and further investment into the sector. Meanwhile, 2024 was a record year for M&A. Acquisitions jumped 19% year over year beating the previous record in 2022. M&A valuation multiples also picked up for in-demand assets. 

In this 2025 report by Venero Capital Advisors we review the latest HR Tech and Work Tech themes and competitive dynamics, funding landscape, M&A activity, company valuations, outlook for the sector and more.