SaaS Capital Blog

SaaS Capital Index Q4 2020 Private SaaS Multiple

Featured

2021 Private SaaS Company Valuations

In our Q3 2020 update, we saw that public market valuations for SaaS companies had surged into uncharted territory, and the momentum continued into Q4. We begin 2021 with multiples 69% higher than where they stood at the beginning of 2020. The median SaaS valuation multiple for public B2B SaaS companies stood at 16.6x ARR on December 31, 2020.

SaaS Capital 2020 Observations and Thoughts for 2021

In last December's recap, we said that we believed the economy and capital markets would tighten over time. We did not expect a pandemic and the suddenly volatile year we have all experienced. Below are our observations on the SaaS and economic markets in 2020, some thoughts looking forward, and a recap of our year.

When Do Private B2B SaaS Companies Raise Equity?

In our 9th annual survey of private B2B SaaS companies, we asked participants questions to explore the overall topic of capital efficiency. This is the first of a four-part series examining the data and focuses on when private SaaS companies raise equity.

Revenue Per Employee Benchmarks for Private SaaS Companies

A common metric by which SaaS companies track their performance is annual recurring revenue (ARR) per employee. This post explores the median ARR per employee broken down by company size and funding type, equity-backed or bootstrapped.

Spending Benchmarks for Private B2B SaaS Companies

How much do SaaS companies spend on customer support or marketing? In day-to-day SaaS company operations, questions like the above are common. So, we asked survey takers what percentage of revenue is spent on cost of goods sold, customer support/success, selling costs, marketing costs, research & development, and general and administrative. This post summarizes the benchmarking data.

Private SaaS Company Valuations: Q3 2020 Update

With the third quarter of 2020 now closed, below are our observations of the SaaS industry and an update to the SaaS Capital Index, which tracks public company valuation multiples.

2020 Growth Benchmarks for Private SaaS Companies

In the first quarter of each year, SaaS Capital conducts a survey of B2B SaaS company metrics. This year’s study marked our 9th annual survey, and with over 1,400 private B2B SaaS companies responding. Below is a summary of our findings on private SaaS company growth rates.

Private SaaS Company Valuations: Q2 2020 Update

Public SaaS company data is the best starting point when valuing a private SaaS business so we created the SaaS Capital Index (SCI) to be an up-to-date valuation tool for pure-play, B2B, SaaS businesses. As of June 30, the median SaaS valuation multiple for public companies stands at 11.4x ARR. Applying the historical private company discount of 28%, the median valuation multiple for private SaaS companies is currently 8.2x ARR.

New Retention Data and the Impact on Valuation

Because of its compounding effect on growth, revenue retention is now well established as the most important metric for ensuring medium- to long-term business health. Earlier this month, we published our 2020 B2B SaaS Retention Benchmarks, which explored retention benchmarks across of range of breakdowns, including annual contract value (ACV), growth, channel sales, venture-backed companies compared to bootstrapped companies, and other breakdowns.

Venture Debt Financing Options for SaaS Companies

There are more options than ever for SaaS businesses to borrow money today. Whether or not your company is profitable or formally venture-backed, and what your specific goals are with the debt will determine which lender and structure is best for your company.