This quarter’s CEOBarometer spotlights subdued trading conditions, faltering investment flows, and the selective rise of AI.

Organic growth has slowed across the board—Software companies posted 13% growth, while ICT Services lagged at 7%. The deceleration is sharpest in consulting services, where low recurring revenue and discretionary budget cuts have driven many businesses into stagnation. In contrast, recurring revenue models continue to provide resilience in Software, where growth has largely stabilised at pre-COVID levels.

Despite these challenges, standout performers in areas like cybersecurity and defence—such as Bridewell, DIGI2AL, and FSP—are still delivering strong double-digit growth, proving that execution and sector positioning remain critical.

The investment landscape also reflects mounting caution. UK-listed tech valuations have dipped below 10x EV/EBITDA, IPO activity remains stalled, and private equity deal volumes have halved year-on-year. Meanwhile rising debt levels and cash interest payments continue to cause stress for some. While top-tier software firms continue to command strong multiples, ICT Services valuations—particularly in consulting—have seen a significant reset.

Venture funding tells a two-speed story: capital remains available for late-stage, AI-native businesses such as Quantexa and Luminance, but pre-Series A funding has collapsed, narrowing the pipeline for future investment.

As the sector recalibrates, this episode offers critical insights into where growth is holding up, where confidence is fading, and what tech leaders need to consider as they navigate another year of cautious optimism and selective momentum.

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About this podcast

Our quarterly podcast offers a clear, strategic perspective on the forces shaping the UK tech sector—M&A, capital flows, valuations, AI, and more.

Hosted by Megabuyte’s Founder & Chairman, Ian Spence, and Megabuyte’s Head of Research & Consulting, Neel Arampatta, the CEOBarometer is designed for CxOs of scale-ups and mid-market companies who value depth over noise.

Learn how at www.megabuyte.com or search ‘Megabuyte for CxOs’.

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Growth Outlook 01m 37s

Capital Markets 22m 20s

Private Equity 33m 57s

Venture & Growth Capital 55m 56s

M&A 01h 01m 18s