The report said activity in mergers and acquisitions (M&A) and capital raising had moderated during the summer months but was beginning to recover, supported by continued interest from strategic buyers and financial sponsors in high-quality businesses.
However, valuation trends remain uneven across sectors. Data from the report show that revenue multiples have declined in several fintech segments since September 2025, reflecting a reassessment of how investors value businesses across the sector.
The report also highlighted a growing emphasis on customer relationships and distribution networks as buyers evaluate acquisition opportunities, particularly as technology advantages become easier to replicate.
“How does the business acquire customers, and how difficult would it be for somebody else to do the same?” the report said, identifying customer acquisition as an increasingly important consideration for technology businesses.
It noted that software development cycles were shortening and features that once appeared highly differentiated could be replicated more quickly. As a result, businesses with strong customer access, established relationships and a central role in customers’ workflows continued to attract strategic interest.
“Trusted relationships tend to endure much longer,” the report said, contrasting them with technology advantages that can evolve and face challenges over time.
The report also pointed to differences between profitable and unprofitable fintech companies. Its valuation analysis showed that revenue multiples for unprofitable businesses had recently compressed, while multiples for profitable companies had remained relatively stable.
Across subsectors, the report’s September 2026 data showed that exchanges and liquidity providers had a projected 2026 enterprise-value-to-revenue multiple range of 5.2 times to 10.8 times, while payments companies had a range of 1.0 times to 3.8 times. These ranges reflect differences among companies within each sector.
D.A. Davidson further said renewed deal momentum could support transaction activity through the end of the year, although buyers remain selective and continue to scrutinise growth assumptions, particularly when evaluating businesses over a longer investment horizon.
