UK Tech M&A Surges on Cyber and AI Wave

Software deals hit record highs as investors double down on mission-critical tech

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The UK is riding a major wave in tech M&A, with nearly £13.2bn invested across 420 software deals in the past year – a record high and a 27% jump year-on-year.

What’s behind the boom? A potent mix of AI innovation, cyber risk, and the ongoing dominance of SaaS. Investors are zoning in on mission-critical infrastructure, and the UK is now home to nearly one in three software buyouts in Europe.

Despite economic uncertainty and valuation gaps, private equity appetite for software and SaaS deals remains strong, according to a recent BearingPoint Capital survey.

“Cyber and AI have moved from buzzwords to boardroom essentials,” said Marcus Archer, Head of Software at Clearwater. “Investors want in – but they also want to know exactly what they’re buying.”

Due diligence has stepped up. Over half of private equity firms now conduct standalone cyber assessments before signing deals – a direct response to high-profile data breaches at names like M&S, Harrods, and Co-op. And with AI becoming a staple in pitch decks, lawyers and analysts are being asked to distinguish between real functionality and marketing fluff.

What does this mean for law firms?

Legal advisors are being pulled in earlier – and asked deeper questions. From dissecting proprietary algorithms to navigating evolving AI regulation, data security, and IP concerns, the demand for legal expertise in the tech space has never been greater.

“Five years ago, nobody asked me to assess an algorithm,” one London partner told us. “Now, it’s the first thing on the term sheet.”

With 60% of PE firms planning to increase investment in software and SaaS this year, the outlook for tech-driven dealmaking is bullish – and the need for lawyers with tech expertise is only set to grow.

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Looking ahead

For lawyers and law firms operating at the intersection of M&A and technology, this isn’t just a busy patch – it’s a structural shift. Firms that can marry sharp legal insight with technical fluency are in pole position to capitalise on one of the most dynamic areas of the market.

If you’re a lawyer with a passion for tech – or a firm hiring into this space – we’d love to hear from you. Get in touch with Sonder to explore current opportunities across top-tier M&A and tech practices.

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