SaaS valuations haven’t been this low since Q4 2015. Of the 119 SaaS companies we follow, the median public SaaS business is trading at 4.9x revenue while the average is 5.95x. The gap between the average and median is only 1.0x, meaning premium SaaS companies are getting slightly higher valuations, but that gap is the…
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Before we get into the meat of this post, first, a quick refresher: a cohort is a group of customers acquired at a particular time; for instance the “January 2018” cohort would be those customers who were acquired in January 2018. One very important measure in SaaS is cohort growth. Often times this is depicted…
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Two more public SaaS companies were recently acquired (Channel Advisor and Zendesk). 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 transactions so…
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Braze is a software company focused on cross channel marketing with first party data. They went public in 2021. Below are some of the highlights and learnings from their latest earnings call as well as their original S1 prospectus. We learn a lot from reading these documents about how big SaaS companies operate and what…
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If you’re looking for your next leg of growth, look to international markets. Below are examples of software companies and B2C companies that IPO’d in 2021, where international expansion is a key to future growth. Quotes are taken directly from prospectuses of each company. Samsara. “we have a growing international presence, with approximately 10% of…
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Some SaaS businesses selling to enterprise customers have a freemium model, whereby they offer free use of a lower tier version of their product. The goal is to entice the prospect to upgrade to a full-use, fully featured paid product. Does it work? Absolutely. Below are examples of SaaS IPO’s in 2021 with a freemium…
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Amplitude is a software company that went public in 2021. They are in the digital analytics space. Below are some of the learnings from their latest Q3 earnings call and further down are learnings from their prospectus (S-1). Financials. We closed with $61.6 million in revenue, up 35% year over year. This was above the…
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Investors always push their B2B portfolio companies to focus on enterprise accounts. They tend to be stickier, can pay more, upgrade more frequently, and can sign multi-year contracts. On the flip side, the sales cycle is longer and acquisition cost is higher. Do you need to be enterprise focused in order to achieve a great…
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There is no dataset explicitly outlining salary levels at early stage companies, but we can see salaries from tech companies prior to IPO. The data below shows the salaries of 182 tech company CEO’s at IPO. A few observations stand out: Some of the best CEO’s take the lowest salaries. For instance, Marc Benioff of…
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ForgeRock is a software company that went public in 2021. Below are some of the highlights from their prospectus. The key learnings we took away: this is a software company that transitioned to SaaS from perpetual license, pricing is not per-user, 3:1 ARR:loss ratio which is good in our view, sales are global, and upsells…
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