The Series A Valuation Report – Q3

What valuations are founders asking for when they raise their Series A? Since May 2018, we’ve had conversations with 517 companies about their Series A rounds. Below is aggregate data on these raises with names redacted to preserve confidentiality. Figures like revenue, valuation, and round size are medians from conversations with founders. Remember the valuations and revenue multiples presented aren’t necessarily what the founders got, but rather it’s what they asked for when talking to VC like us.

SaaS. We’re generalists and tend to look at everything, but as you can see 331 of the companies we talked to were SaaS. The median revenue run rate was $2.8mm, the median round was $5mm, and the median pre-money valuation the founder was asking was ~$23mm. The result was a revenue multiple ask of 8.1x. Multiples since Q2 2018 have actually come down materially from 9.86x to 6.95x.

Transactional models. A transactional company is selling a tech product as needed to a customer; it’s not per a contracted, recurring contract. We talked to 41 companies in the space, and surprisingly these businesses were asking for valuations that were 7.8x revenue even though the business model is not as attractive as SaaS. We find that many companies that are currently transactional are trying hard to move to a SaaS model given the premium valuations for contracted recurring revenue.

Marketplaces. We talked to 48 marketplaces. These are companies with 2 sets of customers and the company takes a cut of the transaction that occurs between the customers (similar to Airbnb, Uber, Lyft, etc). The ask there was a median 9x revenue. The multiple by quarter for marketplace is somewhat nonsensical (we 21x during Q4 2018) due to the fact that during Q4, there was significant anticipation for the Uber and Lyft IPO’s.

Consumer products. We’ve spoken to 16 CPG companies since May. These are businesses with no tech that literally sell a food or beverage in grocery stores. The median ask here was a heady 5.1x revenue of $3.1mm.

E-commerce. The last major category we evaluate frequently is e-commerce, which are those companies selling inventory to consumers online. These businesses had median revenue of $3.2mm and were asking on median 3.8x revenue.

So what’s our view? Don’t be surprised or offended if a VC pushes back hard on the ask. It’s ok to make a strong ask as most VC won’t be turned off, but be ready to compromise. Also recognize that asking for a higher valuation will lengthen the time you’re out fundraising; the higher your valuation, the fewer VC that will be a fit (valuation matters to most).

Our advice to all founders: fundraising is hard and distracting, so make it easier on yourself by being reasonable with the ask. Remember, you’re partnering with an investor who is going to be with you for the next few years, not selling a car to a stranger you’ll never see again; treat the process like you’re entering a partnership and you’ll find the optimal investor and outcome sooner.

Visit us at or email Sammy at if you have a Series A or B opportunity.