Thomas Smale discusses the financial metrics of SaaS business PlanScope at the time of its sale.
Insight
SaaS businesses below $1M ARR sell on net profit, not revenue
“So that will definitely apply where a business is doing over a million ARR, but on smaller businesses we deal with, so our average deal size is around 250,000. For deals at that level, there just isn't the scale, so buyers don't tend to pay a multiple of reven…”
Assertion Not checkable as stated
ThriveCart Reached $1B GMV Selling Lifetime Deals Instead of Subscriptions
“The vast majority of their revenue is actually not SaaS. They had a SaaS product, but they sold it entirely one time. It was a lifetime license, and most people would think that's not a very good business, not a very good idea, but because they were monetizing…”
Assertion Supported
ThriveCart's Acquirer Publicly Announced the $35M Buyout as a Funding Round
“A thirty-five million dollar transaction the fund that acquired it, raised money, acquired Thrivecart as part of the deal, announced as a raise.”
Opinion
Public Market Tech Downturns Do Not Affect $35M to $100M Acquisitions
“Public markets,
Yes, as a savvy founder, you should keep an eye on it, but it doesn't affect transactions at thirty five million dollars, or even a hundred million, to be completely honest.”
Assertion Not checkable as stated
ThriveCart Processed Over $1B in Annual GMV at Exit
“Thrivecart at time of exit actually had over a billion dollars a year in GMV.”
Assertion Not checkable as stated
ThriveCart's Buyer Tripled Revenue Just By Renegotiating Its Stripe Partnership
“My understanding is the buyer is about tripled revenue of the business by renegotiating a partnership agreement with Stripe.”