Tech M&A Surges in H1 2025

Tech M&A surged in the first half of 2025 with a significant jump in deal volume and value. According to Corum’s M&A index, there were 3,113 tech M&A deals in the first half of 2025 compared to 2,296 deals in H1 2024, a 36% increase. Deal value rose 40% year-over-year, spurred by an increase in the number of megadeal —deals over $1 billion—growing from 31 megadeals in the first half of 2024 to 40 in the first half of 2025. 

There are a number of factors driving the surge, including the trillions of dollars of “dry powder” Private Equity firms have on hand to invest in tech companies, the burgeoning demand for AI capabilities and infrastructure, the need for enhanced cybersecurity capabilities, and a continued drive toward digital transformation across sectors.

Trillions of dollars of Private Equity dry powder

With trillions of dollars of dry powder on hand and pent up demand for investment, PE firms made a lot of tech M&A acquisitions in H1 2025. For example, in the Security sector, PE firms were involved in 45% of the deals; in the Healthtech sector, they accounted for 30% of the deals. TA Associates made 36 deals alone in the first six months of 2025, followed closely by Hg Capital with 28. Many of the PE deals in H1 2025 were bolt-ons to platform companies in the firm's portfolio. For example, 78% of TA Associates' H1 2025 deals were bolt-ons, while all of Hg Capital's H1 2025 deals were bolt-ons. There were approximately 8.5 bolt-ons for every PE-involved platform deal—a record high.

PE firms also made some very large deals in H1 2025, the largest being the acquisition of work management platform company Smartsheet by Blackstone and Vista Equity Partners for $8.4 billion. Some other PE-involved megadeals included Clearlake Capital's purchase of healthcare SaaS platform provider Modernizing Medicine (ModMed) for $5.3 billion, and Turn/River Capital's pickup of IT management software company Solar Winds for $4.4 billion.

Many of these bolt-on deals are designed to enhance a PE firm's portfolio in a particular sector and gain market share. For example, H.I.G. Capital bought IT service management company Converge Technology Solutions for $910 million and merged it with an existing portfolio company, Mainline Information Systems, to create a combined company named Pellera Technologies designed to deliver innovative IT solutions to enterprise and mid-market clients.

Other deals signify a trend toward consolidation in certain tech sectors, such as cybersecurity and healthtech. For example, Turn/River Capital's acquisition of SolarWinds, a company that offers software for managing and securing IT infrastructure, demonstrates the interest PE firms have in acquiring established cybersecurity companies. In healthtech, PE firms are targeting tech companies that offer products and technologies addressing various specialties, such as behavioral health, clinical trials, and revenue cycle management. 

Burgeoning demand for AI capabilities 

AI is the rocket fuel driving tech M&A activity in 2025. In fact, nearly 75% of the tech M&A deals in H1 2025 were AI-related transactions, and a major chunk of the deal value resulted from those transactions. A particular focus of these deals has been on AI startups. Buyers are picking up AI startups to strengthen their core businesses, particularly in AI infrastructure and cybersecurity. For instance, Google's acquired cybersecurity startup Wiz for $32 billion in a move designed to enhance its cloud security capabilities, especially its AI-driven security solutions. And Diginex, a sustainability regtech solutions provider, bought AI-powered audience engagement software company Resulticks for $2 billion to enhance its AI data management infrastructure.

Companies are also targeting more established AI-focused companies. For instance, Salesforce spent $8.1 billion to buy data management solutions provider Informatica to build a more robust and reliable foundation for its AI-powered solutions, particularly its agentic AI platform. And AI-focused business transformation company ServiceNow also bolstered its agentic AI capabilities by acquiring agentic AI provider Moveworks for $2.85 billion.

The need to enhance AI infrastructure is also driving tech M&A deals. One recent example is CoreWeave's acquisition of Core Scientific, a data center infrastructure operator, for $9 billion. With the deal, CoreWeave, which is an AI cloud infrastructure provider, effectively doubled its AI data center capacity and strengthened its ability to handle AI and high-performance computing workloads.

Tech deals are also being transacted to gain skilled AI personnel. A prime example is OpenAI’s purchase for $6.5 billion of AI-enabled smart gadgets startup iO Products. The deal gives OpenAI, the maker of AI chatbot ChatGPT, Jony Ive, iO Products’ founder and formerly Apple’s chief design officer, as well as his 50-person team and their expertise in designing hardware for AI interfaces.

The need for enhanced cybersecurity

Growing cybersecurity threats and their increased sophistication are driving M&A deals as companies look to enhance their security defenses through acquisitions. There were a number of megadeals involving cybersecurity companies in H1 2025. In addition, to Google's $32 billion acquisition of cybersecurity company Wiz, cybersecurity and compliance company Proofpoint bought Hornetsecurity Group, a German provider of Microsoft 365 security services, for $1 billion to expand its human-centric security solutions, particularly for small and mid-sized businesses.

There was also a high volume of smaller cybersecurity-related acquisitions and mergers in the first half of 2025. This included a significant number of transactions involving managed security services providers (MSPs) and threat detection & response (TDR) providers. For example, cloud-based cybersecurity company Zscaler acquired Red Canary, a specialist in managed detection and response, for $675 million to boost its threat detection and response capabilities. And U.K.-based security company Sophos picked up cybersecurity company Secureworks for $859 million to expand its managed detection and response services.

Consolidation in the cybersecurity space was also apparent in H1 2025, with large cybersecurity vendors acquiring smaller, specialized firms to create more comprehensive, integrated offerings. One example is Palo Alto Networks' purchase of Protect AI, a company focused on securing AI and machine learning applications. The acquisition strengthens Palo Alto Networks' AI security platform, Prisma AIRS, enabling the company to address the growing security risks associated with the expanding use of AI and machine learning. 

Continued drive toward digital transformation

A continued drive toward digital transformation impelled tech M&A deals in H1 2025. This was especially true for sectors such as healthcare and financial services.

In the Healthcare sector, the shift toward telemedicine, electronic health records, and personalized care is driving tech M&A. Hospitals and health systems are acquiring technology companies that offer digital diagnostics, remote monitoring, and data analytics to improve patient outcomes and reduce costs. In one example, Cotivity, a provider of data analytics solutions to healthcare organizations, paid $3.05 billion for company Edifax to enhance interoperability, connectivity and outcomes across the healthcare system.

In the financial services space, companies are actively acquiring smaller firms with specialized expertise to broaden their service offerings and enhance digital capabilities. For example, Hidden Road, a U.K.-based provider of online credit network brokerage services, was purchased for $1.25B by Ripple Labs, a technology company that provides financial institutions and businesses transparent cross-border payment solutions using blockchain technology and the cryptocurrency XRP. The deal is part of Ripple's broader strategy to bridge the gap between traditional finance and decentralized finance.

These are only a few examples of the drive towards digital transformation across industries. And as companies continue to demand leading-edge technologies such as AI, that digital transformation and the M&A deals that accomplish it will continue in the foreseeable future.

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