SaaS valuation multiples
3 statements across 2 episodes · 0 bullish · 0 bearish · 2 people on the record · first statement Jun 10, 2020 by Einar Volset · across every show →
Everything said about SaaS valuation multiples, oldest first
Jun 10, 2020
Volset: Private equity caps SaaS multiples at 10x; higher requires strategics
“If you're growing zero to 20%, then like what is an easy multiple to get, I think is about three X. And then and from 20 up to about 50%, you can probably get four X, maybe five. From 50 to about a hundred percent growth. This is annual growth. You can get any…”
May 4, 2023 neutral
Donovan: R&D spending variation no longer predicts SaaS valuation multiples
“Interestingly enough, R&D, which the more you spent on R&D before, the stronger your multiple was, because you were investing for growth, now it's neutral. That very, like, there is no predictive, very, The variation in R&D spend does not have any predictive v…”
May 4, 2023 neutral
Donovan: Rule of 40 had zero correlation with SaaS multiples before Q2 2022
“So if you just use rule of 40 where you composite, you smoosh growth and efficiency together, until Q two of last year, there was actually no correlation. So, like, I would have called total BS on using rule of 40 by itself before Q two of last year. It just w…”