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Sectors 15 August 2026

Technology & Digital Economy: what we expect through 2028

Applied AI has moved from procurement pilots into contracted spend, and the financing market has repriced accordingly. Our view on where capital is going in enterprise software, fintech and digital infrastructure — and what it means for owners deciding whether to raise now.

The repricing is over; the sorting has started

The 2022–2024 correction did not end with a return to 2021 multiples. It ended with a split. Businesses with net revenue retention above 110 per cent, gross margins above 75 per cent and a credible path to cash generation clear the bar with institutional investors on terms that look close to the last cycle. Everything else is financed structurally or not at all. In our mandates the difference between the two outcomes is rarely the product — it is whether the numbers can be evidenced in a data room without a reconstruction exercise.

Applied AI is now a margin story, not a growth story

The first wave of AI financing rewarded model access. The second is rewarding gross-margin discipline: inference cost per transaction, retrieval architecture, and how much of the workflow the customer can no longer run without you. Investors we speak to weekly are underwriting the cost curve as carefully as the revenue curve, because a business with 55 per cent gross margins and consumption-based pricing is a very different asset to a 85 per cent SaaS platform, whatever the growth rate says.

Fintech: distribution beats licence

Embedded finance and payment infrastructure continue to attract capital where the business owns distribution rather than a regulatory permission it rents out. In Europe the regulatory perimeter is tightening around outsourced licences, and diligence questions that were compliance footnotes two years ago now sit in the first investor meeting. Owners should expect regulatory readiness to be priced, not assumed.

Digital infrastructure is the quiet compounder

Data centre, connectivity and edge capacity remain structurally short across Europe, and the capital chasing them is now split between infrastructure funds that want yield and sponsors that want growth. That split is an opportunity: the same asset can often be financed twice — once at the OpCo level for expansion, once at the asset level for capacity — if the structure is set up before the process starts rather than after.

What we expect through 2028
Consolidation accelerates in vertical software as sponsors run buy-and-build across fragmented European niches; the platform premium moves to whoever can integrate, not whoever bids highest.
Structured and hybrid capital takes a growing share of growth financing for companies that are three to six quarters from profitability and unwilling to reprice their equity.
AI-native challengers force incumbents into acquisition rather than build, lifting strategic M&A volumes above sponsor-led volumes in enterprise software.
Regulatory diligence — data, model governance, outsourced licences — becomes a standard workstream in every European technology transaction we run.

This commentary reflects the views of Avertis Group at the date of publication and is provided for information only. It is not investment, legal or tax advice, nor an offer or solicitation in respect of any security. Forward-looking statements are estimates and may not materialise.

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