article thumbnail

A $30B Software Company from a $15m Investment

Tom Tunguz

Constellation Software is a $30b+ publicly-traded software holding company employing more than 25,000. A former venture capitalist, Mark Leonard started Constellation in 1995 with $15m of outside investment & a goal of buying vertical software companies with a moat & good unit economics. Growth Source. Acquisition.

article thumbnail

The Impact of the Coronavirus on Software Valuation Multiples

Tom Tunguz

It includes a basket of all the next-generation software companies since 2014.* The bigger question is whether software purchasing habits change because of reduced travel and networking. Let’s double-click on the impact of last week on the valuation environment. This is our familiar forward multiples chart.

Software 262
Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Selling AI : Category Creation of a Different Flavor

Tom Tunguz

Selling software will evolve to selling agents , AI that acts on behalf of users. In 2014, I remember joining a panel at the Gainsight annual conference Pulse, then in its second year. The conference didn’t highlight Gainsight’s software. The efficiencies for rote work are too massive to ignore for many uses.

AI 172
article thumbnail

The Fifth SaaS Correction

Tom Tunguz

Since 2016, public software has witnessed four corrections. Also, 2014 to 2016 saw a 57% reduction in multiples and of course after 2008. Cloud companies' fast growth multiplied by an appreciation in multiples has pushed valuations higher since 2014. Today, we’re in the midst of the fifth. Correction Year.

SaaS 345
article thumbnail

The Best Time of Year to Raise for Your Startup

Tom Tunguz

I set out to determine if fundraising seasonality had changed from this post I published in 2014 which suggested Q2 & Q4 were best for founders. The US software Series A market has become much less seasonal since that post in 2014. The answer is yes. In 2013, the surge in June/July & December stand out.

Startup 240
article thumbnail

How Will the 52% Correction in the Stock Market Impact the Startup Fundraising Market?

Tom Tunguz

The public software sector is weathering the second deepest multiple contraction in the last decade. The question on every software founder’s mind today must be, how will this affect the private financing markets? Only the 2016 reduction of 57% surpasses it. These are marked in peachpuff orange rectangles above.

Marketing 362
article thumbnail

The decade software ate the world

Intercom, Inc.

Putting narrative order on the past decade, a 10-year-period that has somehow remained stubbornly nameless, is quite the challenge, but it’s impossible to make sense of the 2010s without understanding the role of software. The post The decade software ate the world appeared first on Inside Intercom. Rise of mobile.