The early stage VC funding market has experienced a significant decline since the market peak in February 2021. While most of my clients have viable products and market opportunities, fundraising has become a significant challenge.
I regularly M&A and valuation trends in the SaaS industry. One of my go-to resources is the Software Equity Group’s free research. Their recent report 2Q23 Quarterly SaaS Report shows a rebound in the public market and strong M&A volume point to the durability of SaaS in the current markets. In this article, we discuss:…
I consult with a lot of early-stage SaaS startups. Many are trying to raise a PreSeed round of VC funding, and most are struggling. VC fundraising has declined by over 50% since the heydays of 2021, and while preseed and seed stage deals have been hit just as hard as Series A, B, C & D. Some recent data from CBInsights, Pitchbook, and DocSend provide great qualitative and quantitative insights into what has changed in 2023.
It is every startup’s dream to go public. An IPO is the pot of gold at the end of the startup rainbow. The unfortunate reality is that according to recent research by PitchBook of a cohort of 12,574 VC-backed firms from 2018, only 4.7% achieved an IPO. Perhaps it is time for management teams to seriously consider having a ‘Plan B’ if their trajectory to an IPO looks shaky.
The Software Equity Group (SEG) regularly publishes quantitative research on the software and SaaS market M&A activity. The SEG SaaS Index contains dozens of publicly traded SaaS companies. They recently published their SEG 2023 Annual SaaS Report. It provides a ton of data on SaaS valuations and financial operating metrics. The impact of the market downturn can be clearly seen across all categories of SaaS.
Baron Rothschild, an 18th-century British nobleman and member of the Rothschild banking family, is credited with saying that “the time to buy is when there’s blood in the streets.” In late 2022 it is clear that the SaaS market is in trouble. The Nasdaq is off over 34%. Median Enterprise Value/Revenue valuations are off 58% in comparison to their peak in 2021. Many companies might consider now to be a good time to jump into the M&A game. Experience has shown, however, that a well-reasoned M&A strategy is required for success
In the past few months, I have had an unusual number of inquiries from private equity firms about the state of the electronic data interchange (EDI) market. As a corporate development executive, I evaluated over 200 EDI companies as acquisition candidates and led the operational side of a large EDI acquisition. Since then I have conducted over 50 briefings about the state of the EDI market and its key players for various private equity firms and VCs in the past 10 years. The decline of SaaS valuations from the lofty heights of 2021 has sparked an interest in value-driven investors. This got me thinking. Is there an opportunity to disrupt the EDI industry in 2023 through some creative strategic acquisitions?
Separating the noise from signals in regard to competitors is a challenge product managers face every day. A market map of competitor revenues, headcount, VC funding, and enterprise value can help bring a fact-based perspective to those discussions. A market map can be built quickly using a multitude of free resources.
Accounting is not a core skill for most product managers. Yet, basic financial literacy is critical when presenting the impact a product can have on customer revenues, expenses, profits, and cash flows. It is also important when building business cases for new product investments. Deciphering competitor finances, even privately-held competitors, can lead to more effective decisions about product evolution. Product managers should develop basic financial literacy skills.
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
