Software multiples in the past month have gone on an absolute run. The SaaSpocalypse narrative is falling apart as the market realizes enterprise SaaS is more valuable than ever with AI, and AI needs SaaS infrastructure in order to deliver value. As a result, multiples have moved up and we think they’re going to stay there given how strong Q2 earnings have been for the publicly traded SaaS companies that have reported. Below we break down what we’re seeing in various categories. Note that all data can be found at softwaremultiples.com, which updates in real time.
All Multiples
We follow 74 publicly traded SaaS companies. The median multiple as of yesterday is now 4.88x. At the end of May the multiple was closer to 3.50x. That’s a material 39% improvement. Importantly note the stability of the median over the past week.
Above Median Growth
The move for SaaS companies growing above the median (17%+ YOYG) is even better. The median multiple as of yesterday was 8.57x. At the end of May the median was only 5.83x. That’s a 47% improvement.
These moves are extraordinary, and we think more is to come as SaaS companies continue to report, and M&A starts to come back (note the recent announcement that Silver Lake is looking at acquiring Workday). We’ll update this post in a few weeks.
Thank you for your readership. See more blogs and SaaS data at blossomstreetventures.com. Other resources we’ve built for founders include: SoftwareMultiples.com; softwareMRRcalculator.com; FounderInvited.com, and TwoFoundersTalk.com. Founders are always welcome to reach out to sammy@blossomstreetventures.com as well.
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