The SMB M&A Pipeline: Q1 2025

Welcome to the Q1 2025 issue of The SMB M&A Pipeline, the quarterly series that surfaces a top-of-the-funnel breakdown of the deal activity on Axial’s platform. The aggregated metrics include quarterly deal volumes, financial and geographic characteristics, and pursuit rates, sorted by industry category.

All deal data is fully anonymized to protect the confidentiality of these transactions.

Pursuit Rates

“Pursuit rate” measures the rate at which Axial’s buyside members register interest in a deal that an Axial sell-side member has invited them to consider. If NDAs, IOIs, and LOIs reflect the deepening progression of interest among acquirers on a given deal, the pursuit rate is one step higher in the funnel than the signed NDA. It offers insight into the forward deal pipeline and the initial interest level of prospective Axial buyside members.

An Overview of Q1 2025

Q1 2025 was the second-highest quarter for total deal volume on Axial, with 3,049 marketed deals. All seven major industries saw positive year-over-year growth in deal volume, marking the third consecutive quarter of growth across the board.

Healthcare saw the largest YoY increase, up 75.37% compared to Q1 2024. Business Services grew 29.84%, followed by Industrials at 14.49% and Consumer Goods at 13.21%. Food & Hospitality, Transportation, and Technology also saw positive growth, though at lower rates ranging from 3.83% to 12.27%.

Deal Volume vs. Pursuit Rate

Industrials once again led the market, ranking 1st in deal volume and 2nd in buyer pursuit rate—signaling strong and sustained buyer interest

Food & Hospitality and Consumer Goods displayed a mismatch between supply and demand. Food & Hospitality ranked 2nd in deal volume but 7th in pursuit rate, pointing to potential market saturation or more selective buyer activity. Similarly, Consumer Goods ranked 3rd in volume but 6th in pursuit rate, suggesting tempered buyer interest despite a high number of deals.

In contrast, Technology recorded the highest pursuit rate (1st) while ranking just 5th in volume, highlighting strong buyer demand relative to available opportunities. Healthcare, which posted the highest year-over-year growth in deal activity, ranked 4th in volume and 3rd in pursuit rate, showing balanced engagement on both sides of the market.

Below is a detailed breakdown of industry-specific and overall deal activity on Axial in Q1. Feel free to incorporate this data into your materials as you see fit.

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