Every year our friends at SurePath Capital Partners produce a much-anticipated “State of SMB Software” report that measures the level of interest VCs and private equity investors have in the market for SaaS products designed for small and medium size businesses.

Last week SurePath published the 2017 edition, and the news was pretty good for companies looking to raise capital in the SMB SaaS market. SurePath counted 327 deals involving software with a clear small business focus. It wasn’t an exceptionally active year for exits, with 11 of the 327 deals being M&A transactions and two were relevant IPOs.

Of the 327 deals, 287 were venture funded, totaling $2.8 billion. Private equity accounted for 27 deals and another $1.4 billon raised.

SurePath divides the SMB software space into three buckets — Grow My Business (front office), Run My Business (middle office) and Track My Business (back office). Grow My Business is the biggest category, attracting more than half of the VC dollars raised last year.

The Tech Adoption Index has a similar process for categorizing SMB software companies. TAI divides the market into companies helping SMBs do the following — manage the customers (marketing automation, CRM), manage the money (accounting, payments, point of sale), manage the people (payroll and HR) and manage the equipment and supplies (IT, supply chain).

SurePath’s report also noted a strong investor interest in businesses with a clear vertical focus, with nearly $1 billion flowing into 116 deals involving vertical applications, which the report notes tend to higher valuation multiples than horizontal plays. Restaurant-related verticals were the biggest category, raising $274 million across 27 deals.

The largest SMB software venture deal was the $250 million Slack raised from Softbank. The largest PE deal was Hillhouse Capital Group’s $250 million investment in Magneto. The largest M&A transaction was FirstData’s $760 million purchase of BluePay. SurePath also tracked two relevant IPOs in 2017: Yext, which raised $124 million and SendGrid, which netted $96 million.