The Buyer-Led environment opens M&A opportunities in tech startups.
After years of high valuations and abundant capital, many startups now face a far grimmer reality.
- Technology remains inherently deflationary: it enables teams to produce more code for less money. But this efficiency hasn't spared startups from a sharp reset in valuations. As of early 2025, the median valuation multiple for private SaaS companies has dropped to 4.1x.
- Capital is also harder to come by. According to the latest Slush Report, only 18% of founders describe fundraising as “easy” this year. For many, a soft landing through acquisition is becoming an increasingly realistic—and sometimes necessary—option.
- M&A activity overall is at its lowest point in four years.
There may be interesting opportunities in the European market to add a tech dimension to service-sector LBOs (and beyond), and to build a stronger thesis around scalability.
Small startups can sometimes be beautiful (not always). A tech tuck-in is a type of small-scale acquisition (under 10m EUR EV) where a company acquires a small tech asset to complement or enhance its existing offerings. Unlike a traditional M&A deal focused on acquiring full operations or revenue streams, a tuck-in is more about acquiring specific capabilities, technology, or talent (acqui-hire).
Vertical profitable Micro-SaaS. Micro-SaaS are the assets that still trade quite well. They are niche SaaS companies with strong technology, capital-efficient, highly specialized and that are far from the “growth-at-all-costs” playbook. They focus on mid-sized markets with deeply embedded, use-case-driven products.
Startups post Series A. Still burning cash, limited growth. Instead of chasing another risky round or shutting down entirely, they can integrate their product into a larger platform where it has a higher chance to scale. For funds, especially early-stage VCs, tuck-ins provide options in a frozen exit market without the reputational hit of a down round or shutdown.
This kind of deal often includes earn-outs or equity in the acquiring company, giving founders upside if the integration is successful—plus the stability of a salary and support structure post-acquisition.
They have experienced tuck-ins
- In January 2024, consulting and accounting firm Implid acquired legaltech Captain Contrat, an online legal services platform for SMEs.
- In 2021, French life sciences engineering specialist Efor expanded its data expertise by integrating Soladis.
- In October 2021, wealth management group Crystal accelerated its digital transformation by acquiring the technology of Finansemble (Grisbee) to improve advisor productivity.
Preserving EBITDA in tuck-in deals. Negotiating good terms with earn-out is the simple part of the equation. Strong tech due diligence, Earn-out / Retention packages for the tech founders and his team…Earn-out mechanics are only half the battle. To avoid leaking EBITDA, you need to bake the integration roadmap and its economics. The mistake I’m seeing the most is when tuckin is done by service management learning the hard way on how to manage a tech roadmap.
We believe we’re at the early stages of a shift. Tuck-ins aren’t just opportunistic—they’re a smarter, more grounded way to build real tech value in a market that no longer rewards hype. But they only work when integration is taken seriously. I’ve seen too many service-led teams underestimate what it means to absorb a tech product—and end up leaking value fast.
Done right, these small, focused acquisitions can be transformative. They require humility, precision, and a genuine respect for what tech teams bring to the table. That’s where the real upside lies.
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