Software due diligence has become an essential component of the investment process, particularly in the technology and tech-enabled sectors. Unlike traditional IT due diligence, which focuses on how companies use software internally to support operations, software due diligence evaluates the software itself as a product. This includes examining how it is built, maintained, and whether it can scale effectively to meet future demands.
As private equity investment in the technology sector (Opens a new window)(Opens a new window)(Opens a new window)(Opens a new window)(Opens a new window)(Opens a new window)continues to grow – driven by the sector’s high valuations and strategic importance – investors are under increasing pressure to justify their decisions. In a volatile market, understanding the technical foundation of a software product is critical.
