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The Three Valuation Lows in SaaS: 2013, 2016, and 2022

SaaStr

The SaaS Capital Index from SaaS Capital had a nice summary this week of the 3 low points we’ve seen in SaaS multiples, and this chart puts things in great context: As you can see above, in the early days of SaaS … it was tough to be a public SaaS company. It was just too hard to make money at 4x ARR.

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Coupa, Marketo, And the Great Coming Rebound in SaaS

SaaStr

A sign many of those with the biggest checkbooks in SaaS think things will get substantially better. Let’s go back in time … to early 2016. The public markets were brutal then for SaaS, with LinkedIn, Marketo, and other leaders of that generation way down. Just like Marketo was in the 2016 downturn.

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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. In fact, the 75th percentile multiple has appreciated 25% annually since 2016 and the median has increased by approximately 20%. Today, we’re in the midst of the fifth. Correction Year.

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What’s Really Different in SaaS in 2023

SaaStr

Not easy, but easier and easier: There was a bump in 2016, a Flash Crash in SaaS, when budgets were slashed, but it didn’t last long enough to really impact renewal cycles. SaaS markets had fully recovered later that year. Even the 2008-2009 downturn, while truly brutal, didn’t hit SaaS as hard as the rest of the economy.

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SaaS Multiples Are At a 3+ Year Low. Where It Goes From Here.

SaaStr

Many SaaS and Cloud leaders are down more than 50% from their all-time highs. A Covid Hangover in SaaS stocks.’ The top SaaS and Cloud leaders are even accelerating at $1B in ARR, for goodness sakes!! The point is that SaaS multiples are still higher than where they were from 2010-2017.

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What does it take to raise capital, in SaaS, in 2016?

The Angel VC

When we invest in a SaaS startup, which almost always happens at the seed stage, the next big milestone on the company’s roadmap is usually a Series A. Some SaaS companies got big without raising a lot of capital – Atlassian, Basecamp and Veeva are probably the most famous examples. They are a means to a bigger goal.

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Cloud and SaaS Are Up 1000%, Now Worth $2 Trillion

SaaStr

We’ve used various bits of the BVP Nasdaq Index and metrics since they launched a few years ago to highlight trends in SaaS and Cloud. This week even after a pullback, public SaaS and Cloud companies are up an eve 1000% (!) SaaS and Cloud are up +1000% since 2013. since 2013. But does it even matter?

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