Ben Forlani is founder & CEO of Dedale Intelligence, delivering strategic intelligence to tech investors across Europe and North America.
Tech investors are navigating one of the most complex markets we’ve seen in years. Valuations are volatile, growth is slowing and AI has introduced a new layer of disruption that’s hard to quantify. Yet despite this uncertainty, I continue to believe there are solid investment opportunities if you know where and how to look.
At Dedale Intelligence, we’re seeing a clear shift: optimism alone is no longer enough. Today, investors need to combine deep diligence with strategic caution to succeed in the evolving tech landscape.
Multiples Are Down, But Not Low
Valuations have come down significantly since the 2021 peak, but they remain well above pre-pandemic levels.
Median SaaS multiples tell the story: Valuations spiked to over 21 times EBITDA at the height of 2021, fell back to around 12 times in early 2023 and have since recovered to roughly 17 times by mid-2025—right in line with the long-term average.
The implication? Deals aren’t cheap, and competition on the buy-side remains fierce. Investors are under pressure to deploy capital, but it’s harder than ever to find high-quality businesses at compelling entry points.
To navigate this environment, conviction is key. And conviction comes from work—real, early-stage work. The investors I see achieving success are often those who do the digging upfront.
What Really Matters In Tech Investment Today
From my perspective, the fundamentals that matter haven’t changed, but the bar has gotten higher.
Product differentiation is more important than ever. With AI enabling faster replication of software features through low-code and no-code tools, the moat around a product is only real if it can stand the test of evolving technology. Investors need to ask: How defensible is this product, and how likely is that to remain true five years from now?
Customer base quality is another critical lens. Are customers sticking around? Is churn under control? Is there pricing power? Strong retention and expansion metrics, like net revenue retention (NRR) above 120%, are increasingly non-negotiable.
AI exposure is now a permanent part of any diligence process. We’re seeing clear patterns: SMB-focused, horizontal software is typically more at risk of AI disruption, while enterprise-grade or vertical SaaS vendors, which often require deep customization, tend to be more insulated for now. This echoes findings from BCG’s study on AI disruption in enterprise versus SMB software segments.
Where AI Disruption Hits Hardest
AI isn’t just a trend; it’s a reshaping force. In the current cycle, horizontal tools like marketing automation, customer relationship management (CRM) and sales tech are among the most exposed. The reason is that these tools are relatively standardized, and AI-native players can catch up quickly.
Meanwhile, vertical software vendors serving industries like manufacturing, healthcare or construction still benefit from complexity and domain-specific depth. These characteristics give them time to adapt before AI-native challengers catch up.
This doesn’t mean verticals are safe forever; it just means they have a bit more breathing room, something I believe investors should factor into both risk and timing.
Geopolitical Shifts And The Return Of Europe
Macro and geopolitical shifts are playing a bigger role in investment flows. In 2024, U.S. capital pulled ahead as European investor sentiment lagged, due in part to geopolitical tensions and slower economic growth.
But the trend is reversing. In Q2 2025, renewed U.S. interest in European large‑cap deals emerged, partly because European interest rates began to decline, while the U.S. rates remained elevated. In March 2025, the ECB cut its three key benchmark rates by 25 basis points, signaling easier monetary policy in the Eurozone.
For investors, this means macro matters more than ever. Tech valuations are tightly linked to growth expectations, and growth expectations are highly sensitive to interest rate policy. Close monitoring of these macro signals is critical for anyone looking to time entry or exit windows.
Why Buyer-Seller Valuation Gaps Persist
Despite an uptick in M&A activity, valuation mismatches remain a recurring friction point. In many cases, sellers are still anchored to 2021 valuations, especially for companies that haven’t grown significantly since their last raise. At the same time, funds are under pressure to return capital to limited partners (LPs). But exits are hard to execute when buyers aren’t willing to pay up.
We’re seeing a trend toward off-market, bilateral processes where sellers test appetite more discreetly, avoiding broad auctions. These discussions can lead to more realistic deal-making, but only when both sides are grounded in today’s market reality.
For lower-growth or structurally weaker companies, the valuation gap is harder to close. In many cases, deals stall. And unless we see broad capitulation from sellers or a return to rapid growth, this gap may persist.
Why Preparing For Exit Starts Sooner Than You Think
One of the most important lessons I’ve seen from recent market cycles is that exit preparation doesn’t start 12 months before a sale; it starts years earlier.
Strategic investors are constantly “selling” their portfolio companies, sharing updates with potential acquirers, highlighting progress and building relationships with likely strategic buyers. This kind of long-term positioning is especially important when targeting corporates, which are often willing to pay a premium due to synergies or public-private arbitrage.
In a volatile market, these strategies help separate the opportunistic from the prepared. And the prepared are the ones driving value. There’s no easy playbook for investing in tech today. But one principle holds: conviction comes from clarity, and clarity comes from work.
It’s no longer enough to ride trends or chase total addressable market (TAM). Investors need to get granular on product, customer base, AI risk and market dynamics. In doing so, they can avoid noise, stay grounded and invest with confidence, even in a market that’s anything but predictable.
The information provided here is not investment advice. You should consult with a licensed professional for advice concerning your specific situation.
Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?