At Hemisphere Partners, we often talk about how macro policy shifts ripple down to influence private market M&A—and we’re seeing one of the most consequential in years: decentralization. What’s unfolding in the United States under the Trump administration is not just a political pivot; it’s a structural transformation that’s already reshaping software markets and dealmaking dynamics.
In short: the future is local.
From Washington to the States—and Beyond
Since early 2025, we’ve seen an aggressive rollback of federal authority across core regulatory domains. Education, environmental oversight, and data privacy have all become battlegrounds of state-led governance. The Department of Education is on track to be dismantled. EPA enforcement is being paused or abandoned. There is no federal privacy standard—just a growing patchwork of state laws.
What happens next in the U.S. will not be isolated. In fact, it’s a likely preview of how governance will evolve in other developed and developing countries. As national institutions lose their grip—due to politics, economics, or capacity—local and regional governments are stepping into the void. From health policy to cyber regulation, we’re entering a world where rules, enforcement, and public expectations diverge not just by country, but by state, province, or city.
For software companies and investors, this is both a challenge and an enormous opportunity.
Software as the Interpreter of Local Complexity
In this fragmented landscape, value accrues to companies that can decode and navigate local variance. We’re already seeing this play out in education: EdTech firms that can align with Texas’ standards and California’s expectations are thriving. More importantly, companies that make it easier for states and school districts to run their own systems—from ESA disbursements to content compliance—are being actively acquired or funded.
In regulatory tech (RegTech), demand is surging for platforms that can interpret and implement rules across dozens of jurisdictions—be it data privacy, fintech compliance, or labor laws. Tools that help companies remain compliant not globally, but hyper-locally, are now core infrastructure.
And in climate? Local is everything. Cities and states are now the de facto leaders in resilience planning. Software that can forecast wildfire risk in a specific valley, or track water usage at a county level, is more strategically important than national-level mitigation tools. We’re seeing rising M&A interest in climate data platforms, resilience analytics, and hyperlocal sustainability solutions.
A Decentralized World is a Specialized World
At Hemisphere, we believe this trend will accelerate. Investors and buyers are now looking for companies that solve specific, practical, and regional problems. The days of one-size-fits-all enterprise software are fading. Instead, we’re entering an era of modular platforms, adaptable architectures, and localized intelligence.
For founders, this means something profound: focus is the new scale. The more precisely your product fits a fragmented market, the more defensible—and valuable—it becomes.
Whether you’re building in education, RegTech, climate, or healthcare, the future belongs to companies that understand regional realities and solve them nimbly.
The future is not just digital—it’s local.
