Scott Denne has covered the intersection of technology and capital markets for his entire career. In late 2023, Scott began his second tour at 451 Research, the technology research arm of S&P Market Intelligence, where he covers acquisitions, valuation trends and private equity investments. His research explores changes in dealmaking and shifts in valuation. His reports cover broad movements in the tech M&A markets, private-equity investments, analysis of specific deals and forecasts of deal activity in multiple sectors of the software industry. Previously, Scott spent two years as Director of Technology Research for BWG Strategy. In that role, Scott provided primary research to buyside equity investors through a mix of surveys and moderated group discussions. The coverage was built around collecting spend intention, sentiment and budget outlook from customers and channel partners across a universe of 50+ enterprise software tickers. Prior to an eight-year stint as an M&A analyst with 451 Research, Scott was a reporter covering startups and venture capital for several Dow Jones publications, including VentureWire, Private Equity Analyst and The Wall Street Journal. He has been quoted by financial and technology publications, including TheStreet.com, Wired, CNBC.com, AdExchanger and CMSwire.
Venture exits are back, but not evenly distributed. Tech investors hit near-record levels of liquidity in the M&A market last year — a trend that has continued in the early days of 2026. Today's acquisition of Brex, however, shows that even outsized outcomes aren't delivering strong returns to late-stage investors. And that could ultimately weigh on funding for the current crop of AI startups that can't live without it.
The VC market kicks off 2026 with the same strategy that dominated 2025 — concentrated bets around a single theme and a handful of companies. Last year, startups building AI tools and technologies captured an outsized share of venture investment. Barely a week into the new year, two foundation modeling developers are closing in on $30 billion in new funding.
Public markets aren't a promising path for private equity-owned software businesses these days. Three of the last four software vendors to leave the US exchanges via a leveraged buyout are heading right back to sponsors' portfolios after a dismal time as listed companies.
Acquirers never quite took to generative AI. The ability to turn prompts into text, pictures and videos dominated discussions about the future of tech following the debut of ChatGPT three years ago. The commercial applications and impacts, while potentially profound, remained vague and buyers barely moved beyond a few dozen "acqui-hires" in 2023 and 2024.
Wall Street is punishing almost any software stock that's not putting up accelerating growth amid the AI buildout. This is creating an opening for strategic acquirers that are willing to wait and see if AI can reignite the top lines of aging software vendors. In paying $11.5 billion for Confluent, IBM becomes the latest to bet that the newest tech will, eventually, bolster older companies.
If you're not getting an AI premium, you're selling for a discount. Nowhere is that more apparent than in the M&A valuations for business application providers that are exiting the public markets. These days, Wall Street only has an appetite for companies seeing a sudden acceleration in their revenue as AI spending ticks up.
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