Software Hit by Double Whammy (16 Jun 2026) | Torsten Slok's The Daily Spark | Apollo
1. Sources: PitchBook LCD, Apollo Chief Economist, 2. Note: SaaS firms deliver cloud-based software with recurring subscription revenues. Series shows stock of loans outstanding (USD bn) at year-end. Sources: Bank for International Settlements (BIS) Markets recalibrate amid shifting currents, Apollo Chief Economist, 3. **RR = Recurring Revenue. Sources: S&P Ratings, Apollo Chief Economist
Apollo: Many software companies are in trouble because AI disruption is eroding the equity value of incumbent business models while higher-for-longer rates strain the debt that financed them.
This problem is amplified by the explosive growth in direct lending to SaaS firms, which has risen from $8 billion in 2015 to $538 billion in 2025 and leaves a significant amount of capital exposed to both forces, see charts below.
References
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