Bidding wars are breaking out over tech companies that once were easily overlooked: tiny software firms that service entities like hospital pharmacies and sawmills.
The companies are growing too slowly in niche markets to be attractive to venture capital. But investors are competing to buy the firms, betting they can boost growth and that technology will transform even the narrowest segments of the economy. That is fueling a rise in so-called “search fund” entrepreneurs—individuals who raise money to find private businesses that they can buy and run for many years—as well as small buyout firms targeting tech.
