Private equity firm Thoma Bravo suggests some software companies are becoming unattractive targets for acquisition. The firm, known for its aggressive buy-and-build strategy in the sector, indicates that certain businesses have priced themselves out of the market or failed to meet the financial metrics that make a deal compelling.

This cautionary note reflects the changing dynamics of software M&A. After years of soaring valuations, rising interest rates and economic uncertainty have forced a reckoning. Investors now demand clearer paths to profitability, making it harder for founders and early backers to achieve the lucrative exits they once expected.

For software founders and their investors, the message is clear: sustainable growth and disciplined spending are paramount. Companies that cannot demonstrate strong unit economics or a clear route to cash flow may find themselves sidelined. The next wave of consolidation will likely favor firms with proven, scalable business models over speculative growth stories.