Bessemer Ventures is one of the leading venture capitalist firms in the country. They recently published a great report Scaling to $100 Million that provinces detailed metrics about ARR, Growth, Retention, Gross Margins, CAC Paybacks, Free Cash Flow, and Valuations from over 200 of their cloud investments. The data analyzes firm performance by ARR revenue bucket from $1 million to $100 million.
The Software Equity Group (SEG) regularly publishes quantitative research on the software and SaaS market M&A activity. In August, median valuations declined to lowest in 2021
Todd Hill was an account executive with QRS Corporation. He passed away on September 11, 2001, when the Towers fell. Todd was staying on the 17th floor of the Marriott Hotel at the World Trade Center. Todd was known for hearty laugh, effervescent smile, competitive spirit and the great corn cob he’d make for cookouts. Todd was never recovered and his name is inscribed on panel S-46 of the 9/11 Memorial in New York City.
SaaS valuations are at an almost all-time high. The Software Equity Group reported that the median EV/Revenue multiple for public SaaS companies in Q2 2021 was 14.3x. The top 25 SaaS companies in the SEG SaaS Index had EV/Revenue valuations that ranged from 25.3x (Sprout Social) to 90.4x (Snowflake). While Gong’s most recent valuation of $7 billion on $120 million ARR is high – 60.4x – it is not unreasonable. Gong has shown consistent high revenue growth coupled with a strong ROI for its customers.
Pitchbook is basically the gold standard when it comes to data about VC, and Private Equity financing, and M&A activity. Recently Pitchbook published some great free research on US VC valuation trends. I have excerpted a few of the charts from the 27-page report. Net netthings look very good.
American product managers should live overseas for a while. In a global software economy, it is a requirement. You will develop empathy for your international colleagues. You will learn the needs of all your customers that you cannot do from just a Zoom call.
Understanding Enterprise Value can help product managers in many ways. It can help you understand how your product contributes (or doesn’t contribute) to your company’s overall success. It can help you justify more investment in your product when you can explain how the investment will grow Enterprise Value
I was surprised that SEMrush, the SEO optimization platform, had gone public and is on track to generate over $150M in revenue in 2021. A closer look at their financials explains why they have a premium valuation to other SaaS companies.
The Software Equity Group continues to publish excellent research on software-related M&A activity. Q2 2021 showed a modest decline in SaaS operating metrics. There was a sequential increase in Enterprise Value/ Revenue valuations in comparison to Q1 2021
The Software Equity Group’s Q1 2021 M&A Update & SaaS Public Market Update show continued record valuations for both on-premise and SaaS firms. Median EV/Revenue multiples for public SaaS companies reached 14.2x. Once again, private equity drove more than 50% of the transactions.