Highlights from the report:
- HCM M&A activity picked up in Q3 2025 with deal volume rising 35% to 89 transactions. Valuations were stable, supported by a gradually improving macro environment.
- All three HCM subsectors experienced at least a doubling in transaction count. Core HR drove the largest increase, with Talent Management and Talent Acquisition also improving.
- However, VC activity remained subdued. Both deal count and fundraising declined 20%+ YoY.
- Efficiency and automation fueled demand for AI-enabled hiring and sourcing tools; notable deals included Workday acquiring Paradox and ProRank merging with Goodwork.
- Rising employer focus on culture, learning, and well-being drove 28 transactions, highlighted by Engagedly acquiring Butterfly.ai (employee engagement) and Workday acquiring Sana Labs (AI-native learning platform).
- Looking ahead, deal momentum is expected to continue into 2026. Pent-up sponsor capital, improving financing conditions, and demand for AI-enabled, scaled HCM platforms support sustained M&A activity.
DISCLAIMER This presentation is intended for information and discussion purposes only and does not constitute legal or professional investment advice. Statements of fact and opinions expressed are those of the participants individually and, unless expressly stated to the contrary, are not the opinion or position of Harbor View Advisors, LLC (“HVA”). The information in this presentation was compiled from sources believed to be reliable for informational purposes only. HVA does not endorse or approve, and assumes no responsibility for the content, accuracy or completeness of the information presented.
