🔥What's Hot in M&A, Multiples by…

1. Key Themes (2-5 themes)

Theme 1: AI Value Concentration Is Deepening — Both in Private Markets and Public Multiples

The private mega-cap tier is being dominated by AI companies at unprecedented valuations, while public market multiples show a sharp bifurcation between AI leaders and the rest.

"Anthropic is now the most valuable private company in the world at an estimated $965B… OpenAI holds at #2 at $852B… xAI at #5 at $230B."

"The top three now form a cluster between 29x and 33x [EV/NTM Revenue] that was not present in June… the top three re-rated materially, positions four through ten compressed."

Theme 2: M&A Is Replacing IPOs as the Primary Exit Route for Most Private Companies

With IPO windows narrowing and many high-profile companies explicitly deferring listings, M&A is becoming the de facto liquidity mechanism.

"For everyone else on the list, M&A remains the more realistic near-term exit."

"Databricks CEO Ghodsi said in June it would be a 'terrible year' to go public. Canva is targeting 2027. Revolut is pointing to 2028. Stripe remains profitable, liquid via secondaries, and in no rush."

Theme 3: M&A Deal Structure Is Shifting — Fewer, Bigger, Higher-Multiple Deals

The market is transacting at record average deal sizes but with fewer total transactions, and sector composition is shifting toward industrial and healthcare with AI commanding extreme outlier premiums.

"YTD deal value reached $2.2T through July, up from $2.1T through June. Average deal size pulls back to $265M from $270M in June, still the highest figure in the dataset going back to 2015. The market is doing fewer transactions at larger average sizes. That pattern has not changed."

"Deductive, acquired by Elastic at 85.0x ($85M EV), leads as a Pure-Play AI Software deal, the highest multiple in the dataset."

Theme 4: Macro Headwinds Are Creating a Constrained-But-Active Deal Environment

Geopolitical instability, oil volatility, and rate pressure are complicating the market backdrop heading into H2 2026, yet deal activity and equity markets remain resilient.

"The macro environment heading into H2 is higher rates, higher oil, and a conflict with no visible offramp."

"The S&P posted a 9.6% gain in H1 2026" — even as "the Nasdaq [was] down 1.40% on a semiconductor selloff tied to AI infrastructure spending concerns."

Theme 5: Operational Efficiency Among Top-Tier Public SaaS Has Hit New Highs

The elite cohort of public software companies is achieving record efficiency benchmarks, with the Rule of 40 and revenue per headcount both reaching new dataset highs.

"Top 10 Comps Revenue per FTE rebounds to $2,111K and Rule of 40 hits 80%, both new highs in this dataset."

"AppLovin pulls back to 15.3x on 89% gross margin and 85% EBITDA margin, the most efficient business in the cohort."

2. Contrarian Perspectives

Perspective 1: AI Software M&A Multiples Are Detached From Market Reality

While the headline M&A AI multiple of 85x grabs attention, the actual market-clearing price is just 3x revenue. The AI premium is an extreme outlier, not the norm — which has significant implications for how founders and investors should benchmark private AI company valuations.

"Deductive, acquired by Elastic at 85.0x ($85M EV), leads as a Pure-Play AI Software deal, the highest multiple in the dataset… The overall last-30-days market median holds at 3.0x revenue."

The gap between 85x and 3x median is not gradual — it's a cliff. A single small deal is setting narrative benchmarks that are not representative of where most transactions actually clear.

Perspective 2: Reliance Retail's Entry Into the Top 10 Private Companies Signals Non-Tech Capital Formation Is Scaling

Most observers are focused on the AI-dominated top of the private market leaderboard, but a traditional retail conglomerate from India quietly breaking in is a signal that large-scale private value creation is globalizing and diversifying beyond Silicon Valley tech.

"Reliance Retail enters at #10 at $101B, the first non-AI, non-fintech name to break into the top 10 since this table began tracking."

Perspective 3: High M&A Multiples Are Narrowing, Not Broadening

Despite the narrative of a hot M&A market for tech, the data shows the premium is extremely concentrated. July's top-10 M&A multiple median collapsed from 18x in June to 6.7x, as industrials and healthcare replaced tech deals at the top of the table.

"The top 10 by EV/Revenue median is 6.7x, down from 18x in June. The AI premium is concentrated at the very top of the table and well above the market clearing price."

3. Companies Identified

Anthropic

Description: AI foundation model company
Why mentioned: Now the most valuable private company globally, surpassing SpaceX's former position
Quote: "Anthropic is now the most valuable private company in the world at an estimated $965B"

OpenAI

Description: AI research and product company
Why mentioned: #2 most valuable private company; has filed a confidential S-1
Quote: "OpenAI holds at #2 at $852B… [has] filed confidential S-1s with no timing given."

Palantir

Description: Data analytics and AI platform
Why mentioned: Highest public EV/NTM Revenue multiple in the Top 10 at 32.7x
Quote: "Palantir holds at 32.7x (54% growth, 87% gross margin, 61% EBITDA margin)."

CrowdStrike

Description: Cybersecurity platform
Why mentioned: Sharpest upward re-rating in the public Top 10, jumping to 31.2x from 26.5x
Quote: "CrowdStrike jumps to 31.2x from 26.5x."

Cloudflare

Description: Network security and cloud infrastructure
Why mentioned: Major upward re-rating in multiples, forming a new cluster with Palantir and CrowdStrike
Quote: "Cloudflare jumps to 29.7x from 24.8x. The top three now form a cluster between 29x and 33x that was not present in June."

AppLovin

Description: Mobile advertising and software platform
Why mentioned: Described as "the most efficient business in the cohort" with 89% gross margin and 85% EBITDA margin
Quote: "AppLovin pulls back to 15.3x on 89% gross margin and 85% EBITDA margin, the most efficient business in the cohort."

Databricks

Description: Data and AI platform
Why mentioned: Remains private with CEO explicitly bearish on near-term IPO; ranked #8 in private top 10 at $134B
Quote: "Databricks remains private; CEO Ghodsi said in June it would be a 'terrible year' to go public."

Stripe

Description: Payments infrastructure
Why mentioned: Profitable, liquid via secondaries, no IPO urgency — a model for staying private longer
Quote: "Stripe remains profitable, liquid via secondaries, and in no rush."

Dragos

Description: Industrial cybersecurity company
Why mentioned: Acquired by Accenture at 20.1x revenue — one of only four deals clearing double-digit revenue multiples
Quote: "Dragos, acquired by Accenture at $4,175M (20.1x revenue)"

Deductive

Description: Pure-play AI software company (small-cap)
Why mentioned: Set the highest M&A revenue multiple in the dataset at 85x
Quote: "Deductive, acquired by Elastic at 85.0x ($85M EV), leads as a Pure-Play AI Software deal, the highest multiple in the dataset."

Intertek

Description: Quality assurance and testing services
Why mentioned: Largest deal in July's top 10 by EV; commanded 26.8x revenue multiple
Quote: "Intertek, acquired by EQT at $12,400M (26.8x revenue, 12.7x EBITDA), leads by deal size."

Waymo

Description: Autonomous vehicle company
Why mentioned: Stable at #9 in private market top 10 at $126B valuation
Quote: "Waymo (#9, $126B) are stable."

xAI

Description: Elon Musk's AI company
Why mentioned: Ranked #5 in private market top 10 at $230B
Quote: "xAI at #5 at $230B."

Tether

Description: Stablecoin and fintech company
Why mentioned: #3 most valuable private company at $500B
Quote: "Tether at #3 at $500B."

Reliance Retail

Description: Indian retail conglomerate
Why mentioned: First non-AI, non-fintech company to break into the private market top 10
Quote: "Reliance Retail enters at #10 at $101B, the first non-AI, non-fintech name to break into the top 10 since this table began tracking."

Elastic

Description: Search and observability platform
Why mentioned: Acquirer of Deductive at the highest M&A multiple in the dataset (85x)
Quote: "Deductive, acquired by Elastic at 85.0x"

Qualcomm

Description: Semiconductor and wireless technology company
Why mentioned: Acquired Modular (AI company) for $3,900M
Quote: "Modular, acquired by Qualcomm at $3,900M, is the only AI name in the table."

AbbVie

Description: Pharmaceutical company
Why mentioned: Acquired Apogee Therapeutics for $10,900M, second-largest deal in July's top 10
Quote: "Apogee Therapeutics, acquired by AbbVie at $10,900M, follows with no revenue multiple disclosed."

4. People Identified

Andre Retterath

Description: Author of Data Driven VC newsletter; VC investor
Why mentioned: Newsletter author and curator of all data presented
Quote: "Hi, I'm Andre and welcome to my newsletter Data Driven VC which is all about becoming a better investor with data and AI."

Ali Ghodsi

Description: CEO of Databricks
Why mentioned: Cited for his explicit bearish view on the current IPO environment
Quote: "CEO Ghodsi said in June it would be a 'terrible year' to go public."

5. Operating Insights

Insight 1: Efficiency Is Now a Prerequisite for Premium Valuation, Not Just a Nice-to-Have

The data is unambiguous: the companies commanding the highest public multiples are also running the most efficient operations. AppLovin's 89% gross margin and 85% EBITDA margin — alongside Rule of 40 hitting 80% across the top 10 — shows that valuation premium increasingly tracks operational discipline, not just growth.

"Top 10 Comps Revenue per FTE rebounds to $2,111K and Rule of 40 hits 80%, both new highs in this dataset."

For operators: if you're not benchmarking Revenue per FTE and Rule of 40 against the top public comps, you're flying blind on what the market rewards.

Insight 2: For Most Private Companies, M&A Preparation Should Begin Now

Given that IPO timelines are extending years out for even the best-positioned companies, and that M&A deal sizes are at historic highs, private company operators should be actively cultivating strategic acquirer relationships rather than waiting for IPO windows to open.

"For everyone else on the list, M&A remains the more realistic near-term exit."

"Average deal size pulls back to $265M from $270M in June, still the highest figure in the dataset going back to 2015."

Insight 3: Staying Private Longer Is a Viable Strategy — If You Generate Cash

Stripe is the clearest model: profitable, creating liquidity for shareholders via secondaries, and avoiding the quarterly earnings treadmill. This is increasingly a deliberate strategic choice, not a fallback.

"Stripe remains profitable, liquid via secondaries, and in no rush."

6. Overlooked Insights

Insight 1: Ant Group Is Quietly Losing Private Market Value

Amid all the focus on AI companies rising in the private top 10, Ant Group slipped from $210B to $182B between June and July — a $28B decline in a single month — with no explanation given. This is a material move for a company of its size and suggests ongoing regulatory or business headwinds that aren't getting attention in the AI-dominated narrative.

"Ant Group moves to #6 at $182B, but down from $210B in June."

Insight 2: SoundHound Is Trading at a Significant Premium Despite Negative EBITDA

SoundHound appears in the public Top 10 EV/NTM Revenue list at 9.2x despite a -16% EBITDA margin — the only loss-making company in the cohort. This signals the market is pricing in substantial future growth or strategic value, but it also stands out as the most speculative multiple in the group relative to current fundamentals.

"SoundHound (9.2x, -16% EBITDA margin)"