Choi: Software valuation multiples have zero correlation with revenue size
Kathy Choi · The Real Data on What it Takes to Go Big and Eventually IPO with Meritech Capital · Feb 21, 2025 · at 12:23
Kathy Choi of Meritech Capital presents data analyzing public software market dynamics and post-IPO valuation drivers.
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“Here we have a regression that charts AOR multiples today versus the implied AOR scale of the most recently reported quarter of a 139 different software companies. And I want to draw your attention to the r squared value of this regression... And so we see here that the R squared value is 0.09, which is quite low. So there's essentially no correlation between valuation multiples in today's public markets and the size of the company.”
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