M&A volume was still healthy in Q3. “The quarter’s 492 deals virtually mirror 3Q21’s 498 transactions, a period considered to be a great market with little concern about the economy or inflation. Through the first three quarters of 2022, total SaaS deal activity is up 35% over 2021.”
But Q3 multiples were down 35% YOY, to 5.2x. “SEG continues to see valuations remain elevated for companies demonstrating durability,” but that decline is stark especially relative to Q2 (see below).
So in summary the number of transactions is holding steady, but valuations are definitely down; Q3 seems to have marked the beginning of the valuation downturn. Big thanks to SEG for putting the data together. Reach out to them if you’re selling your business; they’re excellent.
Sammy is the Managing Partner and Co-Founder of Blossom Street Ventures. Visit us at blossomstreetventures.com and email directly at firstname.lastname@example.org://blossomstreetventures.com/metrics/