For over a decade, software has been the darling of investors. The reasons were evident long before the pandemic made the sector impossible to ignore. Recurring revenue, high retention rates, and sticky enterprise contracts offered lenders a business model that was both predictable and perceived to be resilient through any economic downturn. The pandemic accelerated that dynamic.

The forces driving the boom were not solely a product of post-crisis regulation. Mega-equity funds raised capital at an unprecedented pace, competed aggressively for software assets. Direct lenders matched this fundraising sprint, armed by robust retail inflows. They offered sponsors speed, scale, and certainty of execution needed to close large deals. 

Cheap credit and a near-zero rate environment supported sponsors in paying ever-higher valuations as digital transformation drove growth rates to historic highs. As multiples expanded, software became the dominant investment theme across the asset class. The largest credit platforms launched dedicated tech funds to capitalize on the opportunity.