The WorkTech market has undergone a seismic shift over the past decade. What was once dismissed as the "forgotten cousin of SaaS" is now one of the most dynamic and competitive sectors in enterprise software, and the M&A activity proves it.
Georgios Markakis, Managing Partner at Venero Capital Advisors, sat down with Gero Hesse and the SAATKORN WorkTech Talk podcast to discuss the evolution of WorkTech, the realities of market cycles, and where founders and investors should be placing their bets in 2026.
Here are the key insights from that conversation.
The Overlooked Past, the Exciting Present
A decade ago, WorkTech lacked the glamour and growth narrative of other SaaS segments. Founders struggled to raise capital. Investors treated it as a commodity play. The market was fragmented, with legacy systems dominating and innovation moving slowly.
Then everything changed.
As HR departments embraced the new technology, funding rushed into the space. Then COVID forced organizations to rethink how work happens. Remote work, distributed teams, and hybrid models became the norm overnight. Suddenly, the software that manages people, talent, and workflows wasn't just a back-office tool. It was mission-critical infrastructure.
That acceleration coincided with another wave: artificial intelligence. WorkTech companies began integrating AI into hiring, performance management, workforce planning, and employee engagement. What had been a stagnant category became a battleground for innovation.
Today, WorkTech attracts serious capital. Strategic buyers like Workday, UKG, and Salesforce are actively acquiring. Private equity is building platforms. And founders who built quality companies in this space are seeing multiples that would have been unthinkable ten years ago.
But that growth comes with complexity.
Understanding the Cycles: Why 2026 Won't Be a Gold Rush Year
The WorkTech market is in a distinct phase right now, and it's important for founders to understand what that means.
Deal volume and ticket sizes tell a story. When we look at the number of WorkTech M&A transactions and the average deal size, we're seeing a normalization after years of rapid expansion. Interest rates have stabilized, though they're higher than the 2021-2022 lows. Strategic buyers are active, but they're more disciplined about valuation and growth rates.
This is the correction phase. A recalibration.
Founders often ask: "Is now a good time to raise? To exit? To double down?" The answer depends on where your business sits in the cycle and how realistic your growth trajectory is.
We are past the gold rush years of 2019-2022. Companies that grew 80-100% YoY with modest unit economics could raise at premium multiples. That's not the market anymore. Today, investors and acquirers want to see:
- Sustainable growth (40-60% YoY, ideally with improving margins)
- Strong unit economics and efficiency metrics
- Best-in-class net dollar retention
- A clear path to profitability or EBITDA positivity
Companies that meet these criteria are seeing strong demand. Companies that are growing fast but burning cash and trading efficiency for growth? The conversation is much harder.
Where the Opportunities Are
Within WorkTech, not all segments are created equal right now.
Talent acquisition and workforce management are most active. These are mission-critical functions that directly impact a company's bottom line. Buyers are willing to pay for solutions that demonstrably reduce hiring costs, improve time-to-hire, or optimize workforce utilization. The competition is fierce, but quality companies are getting bought.
Vertical solutions for specific industries are seeing particular interest. Rather than trying to be everything to everyone, companies that solve specific problems for healthcare, manufacturing, or logistics are attracting acquirers who want to deepen their footprint in those verticals. These tend to command stronger multiples because they're less commoditized.
AI-powered workflow automation is the frontier right now. But the market is still differentiating between real innovation and hype. Companies that have genuinely integrated AI into their product and can demonstrate ROI are attractive. Companies that added an "AI" label to an existing feature will struggle.
Consolidation plays are also active. Larger players are rolling up fragmented markets. If you are a solid mid-market WorkTech company at say $5M-$20M ARR with good growth, you are exactly the kind of target that PE firms and strategic buyers are pursuing.
Valuations and Timing
The WorkTech market is maturing. Maturity brings stability, real revenue, and predictable acquirers. But it also means the days of 15-20x revenue multiples for high-growth SaaS are gone for most of the market.
Current market expectations:
- High-growth WorkTech (50%+ YoY, strong margins): 5-8x revenue
- Moderate growth (30-40% YoY, positive unit economics): 3-5x revenue
- Mature, profitable WorkTech: 2-4x revenue
These multiples vary based on customer concentration, retention, and the specific buyer. Strategic acquirers often pay a premium because they see synergies. Financial buyers are more conservative but can move faster.
Timing matters more than most founders realize. If you are at peak momentum with strong growth, exceptional retention, and market tailwinds, and you get a serious offer from a strategic buyer, that's market intelligence. They see something compelling about your position right now. Taking it doesn't mean you're giving up; it means you're crystallizing value at a moment when it's genuinely high.
Conversely, if you're in a phase where growth is decelerating, churn is ticking up, or the competitive environment is shifting, waiting often makes the situation worse, not better.
What Founders Should Do Now
If you are a WorkTech founder thinking about your exit options or raising capital, here is what you should keep in mind:
Know your metrics. Understand your growth rate, retention, unit economics, and cash runway. Not in rough terms, in precise numbers. This is what buyers and investors care about.
Understand your buyer landscape. Who would actually want to acquire your company? Is it a strategic buyer who wants to expand a capability? Is it a PE firm building a platform? Is it a horizontal player? Different buyers have different criteria and different willingness to pay.
Get professional advice early. Don't wait until you need funding or are forced to sell. Talking to a banker or advisor when you are in a position of strength gives you options. You'll understand your realistic valuation range, the process, and what buyers actually want.
Don't confuse activity with opportunity. Just because there's M&A happening in WorkTech doesn't mean every company should be for sale, and every buyer is a good buyer. Being selective matters.
Think about incentive alignment. If you have investors, make sure you understand their return expectations and whether their timeline aligns with yours. This conversation is easier to have early than when exit discussions are live.
The Bottom Line
WorkTech has matured from an afterthought to a genuine driver of M&A activity. That's great news if you've built a quality company. It means there are real buyers, real capital, and real paths to liquidity.
But it also means the easy days are over. The market rewards businesses with strong fundamentals, clear growth narratives, and efficient unit economics. It's less forgiving of companies that are trading efficiency for growth or betting entirely on AI hype.
If you're building in WorkTech right now, the opportunity is real. So is the competition. Focus on fundamentals, understand your buyer landscape, and make decisions from a position of strength rather than desperation.
That's the market we're in heading into 2026.
About Venero Capital Advisors
Georgios Markakis is Managing Partner at Venero Capital Advisors, the #1 ranked M&A advisor for HR Tech and WorkTech businesses globally. Venero advises founders and companies on M&A strategy, capital raises, and exit planning across the WorkTech and broader SaaS sectors. Georgios Markakis spoke with SAATKORN podcast about the evolution of the WorkTech market and where opportunities lie heading into 2026.
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