Fresh Insights

Analyses, Musings & Observations

The best VC in SaaS

Who are the most successful VC in SaaS? To answer that question, we looked at the past 71 SaaS IPOs (going back 3 years to MongoDB) and who their major investors were. The list is below and includes 46 major investors.   The best. Not surprisingly, Accel, Sequoia, ICONIQ, Insight, and Tiger top the list….
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Q3 SaaS M&A multiples

Software Equity Group is an investment bank that puts out excellent research on SaaS markets. They’re also a great group of bankers. They just released their latest report on Q3. A summary is below but the full report may be found at https://softwareequity.com/research/. M&A volume was still healthy in Q3. “The quarter’s 492 deals virtually…
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CEO Salaries in SaaS

We’ve seen a wide range of CEO salaries in our portfolio, from as low as $35k annually to as much as $350k. While there is no dataset explicitly outlining salary levels at early stage SaaS companies, we have salary data from tech companies at IPO. This can give a sense for what the salary should…
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Measuring SaaS sales efficiency

One of the best ways to look at SaaS sales efficiency is to compare new revenue booked over a given time period divided by sales & marketing spend during the period (New Rev/S&M). While the sales & marketing expense in a period may not necessarily be attributable to a given period’s booked revenue due to…
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SaaS Acquisition Multiples

KnowBe4 is being acquired by Vista which means we have another software M&A comp. Alongside multiples of publicly traded SaaS companies, public SaaS acquisitions are some of the most relevant you can look at for deriving SaaS revenue multiples. These transactions are all cash, the financials are public and audited, and these are all control…
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SaaS Margin Trends through Q3

How have EBITDA margins trended over the past 7 quarters? We looked at trailing twelve month margins for every SaaS company we follow to find out. The data and observations are below. Negative trend. The median margin has gotten worse over time, going from 0% in Q1 2021 to -11% in the latest quarter (Q3…
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Q3 Tech Multiples

Below are revenue multiples for publicly traded consumer tech companies (B2C). Industries and therefore multiples vary widely. If you’re looking for data on SaaS multiples, keep scrolling. Social media trades at 5.2x. Multiples rose steadily through 2020 peaking at 22.7x on median in Q1 2021. YOY growth in the space is 21% on median, with…
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SaaS growth trends

Is SaaS going into a growth downturn? We took a look at YOY SaaS growth trends of 121 publicly traded SaaS companies going back to Q1 2021. The data and observations are below. Current YOY growth. As of Q3 2022, SaaS companies are growing 21% on median with $501mm of LTM revenue (last twelve months)….
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Q3 SaaS multiples down again

SaaS valuations got worse in Q3. We’re back to pre-2016 levels. Of the 121 SaaS companies we follow, the average public SaaS business is trading at 7.1x revenue while the median is 5.6x. Multiples for SaaS companies growing above the median of 21% are better: 8.2x on average and 6.3x on median. The gap between…
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SaaS growth rates at exit

How fast do you need to grow prior to exit? We looked at the last 73 SaaS IPO’s going back to MongoDB’s IPO in October 2017. The data is below. On median, these companies grew revenue 43% from the prior year, while the average was 51%. Median overall revenue was $168mm while the average was…
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