Every quarter we look at the SaaS multiples of publicly traded companies. One trend that really stands out to us: the number of companies receiving a premium multiple is at a multi-year low. Below are the multiples of the 78 publicly traded SaaS companies we follow.
As you can see, the number of companies getting a premium multiple, which we define as greater than 10x, has shrunk materially from the heyday which went from Q1 2019 to Q1 2022. Specifically, 10% of companies are trading at 10x revenue or greater, whereas the peak was 60% in Q4 2020. 2 companies trade above 20x whereas 35 traded above 20x in Q4 2020.
SaaS multiples in Q1 cratered. Of the 78 publicly traded SaaS companies we follow, the median multiple was 3.65x revenue while the average was 5.91x. For higher growth SaaS, the median and average was 6.31x and 8.98x respectively.
Thank you for your readership. Visit us at blossomstreetventures.com for more data and blogs, and email the author at sammy@blossomstreetventures.com or connect on LinkedIn.
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