SaaS multiples have cratered but one small positive trend has emerged: multiples for high-growth SaaS companies are actually moving up.
According to softwaremultiples.com, which tracks public SaaS valuations daily across every SaaS company that has IPO’d since MongoDB’s debut in 2017, the median revenue multiple for higher-growth SaaS — defined as companies growing above the 14.5% median across the full 80-company dataset — now stands at 6.4x. One month ago, that figure was 6.05x. A screenshot is below.
That might not sound like a dramatic move, but it matters in an environment where every headline highlights the demise of software. A sustained uptick in high-growth valuations is a meaningful signal. The slower-growing cohort, meanwhile, continues to trade at just 3.6x, a gap of nearly 2x between the two groups.
In our view, the market is beginning to bifurcate: weaker-performing SaaS companies are being left behind while the market re-rates faster growers. The spread between the two cohorts will be worth watching closely. We’ll continue to monitor the data and update this post.
Thank you for your readership. See more blogs and SaaS data at blossomstreetventures.com. Email the author at sammy@blossomstreetventures.com.
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