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 privatemarket valuations across the transaction spectrum and qualitativeinsights into company business models, technology and trends. Wefeature many of the leading SaaS companies and CEOs acrossinteresting sub-sectors.
Q3 has been a rollercoaster in a year unique in terms of the challengesfor people in their private and professional lives. The pandemic continuesto cause uncertainty across geographies but has reinforced the need fordigital transformation across the board. Political uncertainty in the US hascaused further chaos in the public markets, as it is unclear who willemerge victorious. Amid the turmoil, clear winners and losers haveemerged in the 'new' economy that now exists, with cloud-basedsoftware solutions being the most obvious winner.
Nowhere is this more evident than in the public markets. The GPB SaaSIndex has grown impressively, trading at all-time highs versus Q1 and Q22020. There has also been enormous appetite for software IPOs, with ahost of private companies tapping into this market sentiment and listingfor the first time in Q3. Snowflake, Palantir, Asana and many more havegone public in a combination of traditional IPOs and direct listings,gaining access to capital and providing liquidity to longstandingshareholders. In the private markets, strategic M&A for the highest qualityassets 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 haveshored up their own balance sheets, and PE backers have fortified theirportcos and are ready to aggressively look for high-quality inorganicgrowth opportunities. However, COVID-19 and the upcoming US electionmean that the deal environment will be fluid and ever changing over thenext few months.