Outlook 2025: Technology

As we head into 2025, we're seeing many reasons for continued strengthening in the M&A and private capital markets. Over the past year, there has been steady improvement in the rate environment, generally strong consumer spending and financial health, and solid corporate earnings and margins.

Against this backdrop, we believe 2025 will see ongoing growth across several areas of the technology industry, and we're excited for the opportunities to come. See our perspectives on the overall M&A and private capital markets.

Technology: Driving Digital Transformation

In a constantly evolving and dynamic world, companies in every industry are seeking ways to digitally transform their operations to improve efficiency and remain competitive. Technology is the backbone of these efforts, with strong demand for solutions that help businesses remain compliant with increasingly complex regulations, protect themselves from expanding cyberthreats, modernize their infrastructure, accelerate learning and skill development, and gain meaningful insights from deepening troves of data.

Due to these factors, a wide range of technology categories are capturing investor attention, with especially high interest in high-quality software and tech-enabled services businesses. As macroeconomic conditions improve in 2025, we expect to see M&A activity pick up. We also anticipate a continued focus on 50/50 sponsor partnership deals and alternative liquidity solutions across CVs and secondaries.

Below, our senior professionals share the trends behind this momentum, key categories particularly well positioned for success, and recent clients that exemplify the industry's investment potential.

Compliance Technology: Complicated Regulations, Increasing Risks

The increasing complexity of the global regulatory environment has driven expanding demand for a wide range of dedicated compliance software solutions, including governance, risk, and compliance (GRC); environmental, health, and safety (EHS); and supply chain risk management (SCRM). These software solutions are vital for companies to track and ensure compliance and keep pace with best business practices.

Several recent Harris Williams clients spanning the global GRC, EHS, and SCRM ecosystems exemplify the many sought-after themes and businesses within compliance software. Australia-based Camms provides critical strategy and project management tools to streamline the corporate GRC function. Headquartered in Belgium, Lisam Systems provides environmental, health, and safety (EHS) and sustainability solutions with a well-integrated chemicals management platform. Our work with Nalanda as well as Apax in their acquisition of Veriforce is evidence of continued strong interest in solutions to address supply chain risk and contractor management.

Data & Information Services: From Data to Decisions

From data-driven research and consulting and pure-play data providers to value-added solutions, the data and information services sector offers substantial runway for expansion. Platform providers that can combine both public and proprietary data to provide actionable insights and improve strategic decision-making are poised for long-term growth.

In this area, multiple Harris Williams engagements—including PEI Group, Chambers and Partners, and aosphere—demonstrate valuable ways of collecting, aggregating, and analyzing specialized data to help clients unearth meaningful insights, drive better and faster decisions, and improve productivity.

Education, Training & Learning Technology: Accelerating Opportunity

The widespread shift toward online learning over the last few years has unlocked significant opportunities to deliver knowledge and skills training more efficiently and effectively across a range of different applications. While traditional academic learning and career-oriented training have, of course, seen immense benefits, technology has also driven significant improvement in compliance-oriented areas such as EHS training delivered by Health & Safety Institute and outdoor recreational safety training provided by Kalkomey. Harris Williams advised Neuberger Berman Capital Solutions on their minority investment in Health & Safety Institute, and Kalkomey Enterprises on their sale to Macquarie Capital.

The K-12 and higher education markets have also benefitted from broader technology adoption, with significant innovation in both curriculum and instruction as well as platforms supporting the administrative workflows and key operational aspects of institutions. Harris Williams client EverDriven, the leading provider of tech-enabled mobility solutions for K-12 schools, exemplifies a unique example of how technology is helping schools solve operational challenges.

Cybersecurity & IT Services: Specialized Capabilities Attract Investors

Rapid technology evolution and adoption, constant regulatory changes, and increasingly sophisticated security threats are driving demand from companies for sophisticated software and solutions to more effectively manage their IT operations. This dynamic has led to sustained growth in the cybersecurity and IT services sector, with multiple segments seeing elevated investor interest.

A variety of Harris Williams clients spotlight this opportunity. The Purple Guys, for example, solves difficult IT problems through a comprehensive suite of mission-critical outsourced technology, cloud, security, and consulting services. NWN Carousel, on the other hand, is a best-in-class cloud communications service provider that gives customers clear visibility and control of their cloud communications infrastructure, network, and endpoints.

And as cyber threats and regulatory requirements increase, companies are increasingly partnering with IT services providers with demonstrated vertical experience and specialized capabilities. Nuspire is a prime example, delivering managed security, managed detection and response, endpoint detection and response, and cybersecurity consulting services. Another is CyberSheath, a managed services provider that helps its customers in the U.S. defense industrial base adhere to Cybersecurity Maturity Model Certification compliance standards.

The Built Environment: Efficiency, Profitability, and Safety

Powerful dynamics are driving higher demand for software and technology tools that serve the architecture, engineering, and construction (AEC), property management, commercial real estate, and residential property markets.

For example, companies in the construction sector are increasingly using innovative AEC software solutions to improve efficiency, profitability, and safety. At the same time, trends in the real estate and property sector are causing greater technology adoption.

Several recent Harris Williams engagements illustrate the value-creation opportunities and M&A momentum in AEC and property tech, including Lumion, BiggerPockets, CINC Systems, Sogelink, and Newforma.

Looking Forward

Technology adoption across sectors is accelerating due to intensifying competition, higher customer expectations, the proliferation of compliance rules and regulations, growing data privacy concerns, and other factors. With these tailwinds behind them, a diverse range of technology businesses are seeing the steady growth and healthy margins that investors prioritize.

"Against a backdrop of an improving economy, investors will continue to pursue opportunities across the technology industry as companies of all kinds increasingly rely on software and automation to gain important operational benefits," says Michael Kim, a group head and managing director. "There are a variety of subsectors that present opportunities to scale meaningfully through both accelerated organic growth and M&A."

"High-quality software and tech-enabled companies delivering both strong financial performance and demonstrable, material value to customers will continue to attract outsized demand in this market," adds Thierry Monjauze, a group head and managing director.

In 2025, we look forward to partnering with technology investors and company leaders worldwide to help them navigate the M&A and private capital markets and unlock value in their businesses.

Learn more about the Harris Williams Technology Group.