The software market in Europe and Iberia enters a new phase of consolidation after the adjustment experienced in 2023. Scale, data quality and artificial intelligence are consolidated as the main vectors that are influencing investment and technological development.
After this adjustment, the software sector in Europe and in Iberia has entered a more mature and structural phase. The recovery of mergers and acquisitions activity in 2025 does not respond to a simple rebound, but to a more selective consolidation process, in which technology, data quality and the sustainability of the business model outweigh accelerated growth. This is reflected in the new Software 2025 Report, prepared by Bondo Advisors.
Sector specialization
Business software and the SaaS model are once again at the center of activity. In a still very fragmented ecosystem, consolidation is based on critical solutions for the business, with recurring income and high sector specialization. In this context, Spanish companies stand out that have managed to position themselves as strategic assets, such as Amadeus, an international benchmark in software for the travel sector; Factorial and Perk, with a growing weight in advanced technological solutions; o Grupo Castilla, specialized in human resources software within the mid-market segment.
One of the differentiating features of this new cycle is the greater weight of operational and technological criteria in the acquisition processes. Buyers no longer prioritize only growth, but indicators such as net customer retention, gross margins, commercial efficiency or the balance between growth and profitability. Metrics such as the Rule of 40 have become established as a reference to evaluate the real solidity of SaaS models, penalizing proposals with structural weaknesses.
Software with new features
Artificial intelligence (AI) acts as a catalyst for this change. Its impact goes beyond new functionalities and directly affects product architecture, process automation and data exploitation. This raises the technological bar and reinforces the value of companies capable of integrating these capabilities in a robust and scalable way.
The report also highlights the growing attraction of international capital to Europe, driven by the convergence of valuations with the United States and a more stable macroeconomic environment. In Iberia, this dynamic translates into a high weight of foreign buyers, interested in assets with specialization, proven technology and potential for international growth. In this context, companies like Nalanda, focused on digitalization and supply chain management, exemplify the attractiveness of Spanish software within pan-European consolidation strategies.
Artificial intelligence acts as a catalyst for this change. Its impact goes beyond new features
As a whole, the market is moving towards a more demanding, but also more solid, model. Consolidation continues, although on more rational bases: focus on product, data control, operational efficiency and technological scalability. Software is no longer just a promise of growth but is consolidated as a critical infrastructure, in which technical quality, data control and the ability to scale technology become determining factors.
By Joshua Novick, Managing Partner at Bondo Advisors
