Pulse News

**92 Software Startups That Could Be for Sale This Year**

Introducing The Information's Enterprise Software Startup Takeover List

By Rocket Drew, Jon Victor and Akash Pasricha

Feb 26, 2025, 10:38am PST

Many startups that sell cloud-based software to companies are struggling with the aftermath of the pandemic's low-interest-rate period, which encouraged businesses to spend more on tools to help employees work remotely and investors to pour tens of billions of dollars into these startups.

Now dozens of them face dwindling choices. They are growing too slowly to be good candidates for initial public offerings, at least for the next few years. Meanwhile, investors in the oldest startups face pressure to return cash to their limited partners. That makes these aging enterprise startups candidates for takeovers: Productivity software maker Coda, for example, agreed to sell to Grammarly in December.

**The Takeaway**

- We identified 92 highly valued enterprise software companies that have not raised funds in at least 18 months.

- Some of the companies are seeking an IPO but might not be growing fast enough to go public.

- Inxeption, a logistics company that matched our criteria, shut down last summer.

To identify the startups under the most pressure to sell, The Information examined enterprise software companies that were valued at $1 billion or more, according to PitchBook, and that hadn't raised new funds since June 2023. More recent funds would have given them more time to operate and potentially grow. We also included other enterprise software companies that our reporting suggested might consider an acquisition.

"A lot of companies raised money at peak multiples in 2021," said Todd Olson, CEO of Pendo, a company on our list that helps other companies manage their software products, such as by collecting information about users' behavior. As a result, he expects to see more mergers and acquisitions this year. “Multiples have compressed since 2021." He said Pendo aims to go public eventually, though it's unlikely to happen this year.

**Pandemic Hangover**

The enterprise software market became crowded following the pandemic-driven shift to remote work in 2020. As businesses invested in tools to help their employees collaborate remotely, venture capitalists poured money into startups—sometimes at valuations as high as 100 times their annualized revenue. In 2021, a record 560 startups were valued at over $1 billion.

But the software spending binge didn't last. Venture capitalists' bet on remote work faltered as many companies brought workers back into the office at least several times per week. On top of that, customers tired of managing software from multiple vendors; many switched to buying multiple products from a single vendor, often a large incumbent such as Salesforce or Microsoft.

Startups that sold specialized software for solving one problem in an enterprise—also known as point solutions—were hit especially hard. One example is Miro, which sold an online collaboration tool that took off during the pandemic, earning it a $17.5 billion valuation in 2021. When rivals like Microsoft started to copy its product, Miro struggled to maintain its momentum. The company laid off staff in two rounds of cuts in 2023 and 2024.

Even software companies that went public, like Zoom Communications, have suffered brutal growth slowdowns. On Monday, Zoom reported that revenue grew 3.1% in the year ended Jan. 31, the same as in the prior year, and projected that revenue would grow just 2.7% in the current year.

But with little prospect of returning to their previous growth rates, some software businesses are certain to take buyout offers—including from private equity firms, which have become increasingly active. In the past few months, private equity firms acquired Zuora and Smartsheet, two enterprise software vendors, for $1.7 billion and $8.4 billion, respectively.

"We're seeing a lot of buyers reaching out, wanting to talk about things in our pipeline and other deals that are in-market,” said Ryan Lund, a software investment banker at Houlihan Lokey, an investment bank that handles mergers and acquisitions. “I'd say there's a little more—incrementally more—optimism and feeling as though 2025 is going to be a more active year."

In some sectors, there are simply too many companies competing for the same customers. Industry Ventures, which buys secondary stakes in startups and other venture funds, has identified about 50 companies making software for sales, marketing, and similar functions that could be acquisition targets, many with less than $100 million in annual recurring revenue, or revenue from subscriptions that automatically renew until canceled. Hans Swildens, the firm's founder and CEO, said he expects as many as half of all enterprise sales software companies to be acquired in the next few years.

The older generation of enterprise software startups also face new competition from generative AI products. “I think any investors and/or leadership team will have to answer the question 'Is this an AI-proof business?'" said Pendo's Olson. Some of the pandemic-era software unicorns have launched new artificial intelligence tools in an effort to boost growth. Gusto, which makes human resources software, has developed an AI assistant that can answer customers' compliance questions. Airtable, another online collaboration tool, has rolled out AI features to analyze customer feedback or organize performance data. Airtable said its annualized revenue growth had accelerated to 30% year over year as of November. Another pandemic-era unicorn, scheduling software vendor Calendly, has been profitable since 2016 and has "zero plans for acquisition," a spokesperson said.

Other companies are gaining AI expertise through acquisitions. Miro has acquired startups in the last two years with the goal of offering software to automate product design. DataRobot, which makes software for business analysts, acquired Agnostiq, whose technology helps companies deploy AI applications, earlier this month to bolster its AI credentials.

**A Tough IPO Market**

Software startups face another challenge: It's harder these days to go public. Investors want a company to have at least $500 million in annual revenue, 30% growth, and a plan to break even within 12 months.

Many startups have failed to grow into the dizzying multiples from their 2021-era funding rounds, making it difficult to go public at a price that would satisfy their investors. These companies might instead seek a buyer to return cash to their investors and possibly allow employees to cash out their stock options as well.

The companies that will have the hardest time finding a buyer are those building software for multiple tasks that can be used in a wide range of industries, said two investors. Companies that make specialized software for specific industries, such as education, are more likely to have strong financial metrics, easy AI integrations, and defenses against new AI entrants, they said.

Logistics companies that had raised large sums from investors in 2021 and 2022 could also be acquisition targets. Ten startups that sell logistics and supply chain software or connect shippers with freight providers are on our list, including Project44 and FourKites. Logistics companies have been under pressure to consolidate; last week, we reported that logistics firm Forto is exploring a potential merger or sale.

These companies have struggled as venture funding has dried up, demand has dropped from pandemic-era highs, and many have burned through cash to grab market share from incumbents. President Donald Trump's changes to trade policy could make some logistics software startups attractive takeover targets for big companies that are overhauling their operations to adjust to higher tariffs.

"Supply chain has been incredibly active" for mergers and acquisitions, said Lund. He expects this to continue as companies try to diversify their sources of manufacturing in anticipation of possible tariffs. "So we're very bullish on supply chain," he said. "We expect to see a very active practice there."

Project44, whose software helps connect shippers with carriers, has fielded calls from prospective buyers, including incumbent logistics companies, said CEO Jett McCandless. He expects consolidation among logistics companies, but he said Project44 is not interested in an acquisition.

Inxeption, which created a digital marketplace for businesses to buy from other businesses and was valued at $3 billion in 2022, shut down last summer after several shifts in strategy, highlighting the pressures on these companies. The marketplace never took off, according to three former employees. Companies made deals with each other directly, cutting out the middleman, and Inxeption faced increasing competition from Amazon's commercial sales. Inxeption tried to add AI tools to its marketplace, but they were not enough to turn the company around.