AI is rewriting software – yet markets fail to recognize defensibility

Heading into 2026, software equities have been quietly derating. Median EV/1-year forward sales multiples for a Bessemer Venture Partner index rule-of-40 company have dropped from 9.0x to 5.6x (-40%) over the last 12 months. Multiples are being reset as investors are growing concerned that AI will disrupt the B2B software market, leading to higher risk-premiums.

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The Strategy& team have defined five main characteristics of AI-defensible business models, including:

1. Deep embeddedness in mission critical processes 

2. Control and enablement of data or data rights

3. Verticalized deliveries with strong domain expertise (in particular blue-collar verticals)

4. Regulated and compliance-heavy processes with high workflow complexity and operational risk

5. Services and/or hardware being an intrinsic part of the software offering

Although trading at above-average multiples, BVP companies that are defined by these characteristics are trading down as much as 30%, much like the wider BVP index, which is down 31% over the past 3 months. Hence, the increase in software risk premiums is also applied to businesses we believe are strongly positioned to increase customer value in the AI era.

Milos Lørup Bartosek, Partner at Strategy& in Oslo says PEs are closely monitoring the technological developments and impact on public and private markets.