Tom Tunguz

JANUARY 4, 2023

The US startup M&A market in Q4 2022 was one of the quietest in the last 20 years. in Q4 2021 to a paltry $2.1b A $22m median M&A price implies most of these transactions were acquihires - acquisitions that value a company for its team. It rivals the dotcom bust & Global Financial Crisis for its paucity. in Q4 2022.

Startup 298

Startup Marketing Acquisition Pricing 298

SaaStr

JULY 16, 2023

Dear SaaStr: Do Late Stage Startups Prefer to Get Acquired or Go Public? When it was literally an IPO a Day in 2021, it seemed almost easy. It Was an IPO-a-Day in 2021. If all that matters is money, selling for a high price, especially late stage or just post-IPO is the way to go. It really varies.

Startup 224

Startup Acquisition Pricing SaaS 224

SaaStr

AUGUST 26, 2022

So they remain uncommon, even as some startups are under runway stress, etc. #2. Series B and later prices are down across the board from their peaks in 2021 and Q1’22, down 30% or more. Fenwick’s blended numbers see overall Series B and later round pricing down about 30%. #3. They’d rather pass.

Pricing 295

Pricing Social Media B2C Startup 295

SaaStr

NOVEMBER 10, 2022

The problem now is in many cases, startups and bigger like Meta are simply stuck with teams that are far less efficien t than we had pre-Covid. And all of this will surface a ton of inefficiency that grew up in tech and SaaS and Cloud in 2021 and early 2022. Marketing teams bloated in size to achieve the same goals.

Sales Hiring 264

Sales Hiring Pricing Cloud Startup 264

SaaStr

APRIL 24, 2021

A lot of our SaaS older times don’t quite know what to make with a lot of B2B startups these days, let alone some public SaaS companies. So many startups these days are claiming they have “ARR” from revenue that … doesn’t recur. In 2021+, Yes. Doesn’t ARR stand for Annual Recurring Revenue?

Merchant Services 357

Merchant Services SaaS Payments Payment Solutions Payment Services 357

SaaStr

JULY 29, 2022

But what about startups? Most VC funds “carry” startup investments at their last round price, unless their value has been materially impaired. So that 100x unicorn round that closed in 2021? Even if the startup isn’t quite a rocketship anymore, most smaller VC funds will stay hold it at the same value.

Startup 282

Startup Venture Capital SaaS Cloud 282

SaaStr

JANUARY 4, 2024

2021 was nuts, with crazy growth and crazy multiples. In 2022, revenue growth held up for many leaders, but share prices and multiples cratered. It was mixed actually, even if startups didn’t seem to get a breather, it wasn’t so bad for most public SaaS leaders. So 2023 was a weird year. And 2023?

Startup 171

Startup SaaS AI Pricing 171

SaaStr

AUGUST 31, 2021

Folks who not only understand you, but also thrive in the same state of startup terror or euphoria. . And though there are many great reasons to attend the SaaStr Annual 2021 – the amazing networking, incredible no-fluff content, built-in fun – these are the top 6 takeaways from past attendees : #1 – Learn from the best .

Startup 278

Startup Investment Enterprise Pricing 278

SaaStr

MAY 8, 2024

As a SaaS veteran who built and sold a software company for nine figures, invested in startups since 2013, 10x-ing his fund, and continues to build a powerhouse community of SaaStr fans, he offers some hot takes on the communities’ burning questions. Sales is much harder than in 2021. 2021 made no sense in terms of budgeting.

Metrics 202

Metrics Scale Sales Hiring SaaS 202

SaaStr

NOVEMBER 1, 2021

David Skok of Matrix Partners and Key Banc have been doing an incredible SaaS startup survey for many, many years and the latest edition is out here. Only 41% of the SaaS companies in the survey use per-seat pricing. But it’s a good reminder that per seat pricing is great — when it’s what the customer wants.

Pricing 218

Pricing SaaS Startup Metrics 218

SaaStr

JULY 20, 2021

That’s a wrap on SaaStr Money 2021 ! Fundraising for a Startup vs Fundraising for Banks with Treasury Prime’s CEO and Piermont Bank. Learn how Metromile embraces this future with technology to: – Adapt prices to focus on actual use to be more fair and dynamic for consumers.- Dan Preston, CEO @ Metromile. Quite a day!

Payments 253

Payments Payment Services SaaS Payments Banking 253

SaaStr

AUGUST 1, 2022

If as a VC you invested at $10m pre initially, and say it’s 2021 and that same startup is doing a 100x round at a $300m valuation, this early VC fund can pick and choose whether to invest more or not. And the price is 30x higher, so anything but a huge check won’t really move the needle on ownership. Just ask.

Venture Capital 275

Venture Capital Startup Investment Pricing 275

SaaStr

MARCH 4, 2024

2021: “Just raise the extra capital! We don’t need it, but at that price — it’s basically free” 2024: “Free? jasonlk) February 15, 2024 So, so much has changed since the peak crazy days of 2021. A High Priced Round Puts a Ton of Pressure On The Exit and Growth Rate Raise $2m, $4m, $10m? Selling for any price is OK.

Finance 215

Finance Payment Solutions Payments Pricing 215

FastSpring

APRIL 18, 2024

Some businesses outgrow their home countries after a seed or startup period that saw initial success domestically, while some businesses founded with niche markets or in smaller countries may need international sales as table stakes on day one. In this article, we focus specifically on price localization: What price localization is.

Payment Methods 78

Payment Methods Payments SaaS Payments Merchant Services 78

SaaStr

APRIL 1, 2023

So everyone is now paying the price for lowering the bar in the Boom Times of mid ‘20 to early ‘22. While layoffs are all across the news today, looking back, July 2021 was the nadir for layoffs. Everyone was hiring everyone, anyone, back in mid-2021. And now we’re paying the price. We all did, just to get it done.

Sales Hiring 247

Sales Hiring Investment Leadership Startup 247

Clouded Judgement

JANUARY 12, 2024

Setting the stage for our convo was the increase in startups either shutting down or being acquired / acquihired recently. The big cash piles raised in 2021 are starting to get smaller, and we dug in on how investors and founders should be thinking about the world. This all shifted in 2021. Well, we all know this happened.

Cloud 284

Cloud Venture Capital Acquisition Metrics 284

Kellblog

JANUARY 30, 2021

I certainly didn’t have “global pandemic” on my 2020 bingo card and, even if I somehow did, I would never have coupled that with “booming stock market” and median SaaS price/revenue multiples in the 15x range. That said, I’m back on the proverbial horse, so let’s dig in with a review of our 2021 predictions. 2020 Predictions Review.

Technical Review 143

Technical Review Payment Services Payments AI Search 143

SaaStr

NOVEMBER 17, 2023

Well, certainly it exploded in 2021, in my portfolio at least, if perhaps not as dramatically as in the public markets. The startup I invested in that were acquired by PE in the 2020-2021 Boom were acquired for 8x in one case, 12x in another, and 15x in a third. The prices would be lower today for the latter two I suspect.

AWS 237

AWS SaaS Pricing Acquisition 237

Tom Tunguz

FEBRUARY 22, 2022

PitchBook surmises non-traditional VC (aka hot money) comprises 78% of venture dollars invested in 2021. Across Series A to Series E rounds in the US, hedge funds participated in 63% of startup financings worth more than $200B in 2021. 2021 marked a near universal strategic focus on Series C, D, and E rounds.

Finance 356

Finance Pricing Investment Startup 356

SaaStr

APRIL 23, 2024

Like many SaaS startups, Databricks had a big vision from the beginning, when people believed that no one cared about a unified data platform. They achieved product market fit with data engineers who thought it was a better product from a price and performance standpoint. In 2021, when Nadim joined, Databricks made two very big bets.

Technical Review 221

Technical Review Government Innovation Engineering 221

SaaStr

JUNE 30, 2023

Nature is Healing Salesforce is now worth > $200 Billion again pic.twitter.com/9v29wRsFNY — Jason ✨Be Kind✨ Lemkin  (@jasonlk) June 27, 2023 The SaaS markets peaked in December 2021, and so did SaaS IPOs. Per CNBC, HashiCorp in December 2021 was the last top-tier tech IPO to go out. It Was an IPO-a-Day in 2021.

SaaS 178

SaaS Cloud Startup Pricing 178

Tom Tunguz

MAY 23, 2021

In 2021, the post-money valuation has spiked 60% from $48.1m While not as hyperbolic an inflation rate as copper or lumber, the price trajectory of early stage cloud startups does result from a similar supply demand/imbalance. But it hasn’t soared like it’s older brother in 2021, preferring a more consistent path.

Software Review 364

Software Review Venture Capital Cloud Pricing 364

SaaStr

MAY 27, 2024

Public valuations are still at a fraction of their 2021 peaks, but seed rounds are more expensive than ever. There is more capital available to startups than ever before. The influx of capital has made it easier for startups to raise money, but it has also led to higher valuations and more competition. Is it sustainable?

CTO Hire 183

CTO Hire Development Team Review Software Review Technical Review 183

Tom Tunguz

JANUARY 17, 2022

Let’s compare data from 2010 and 2021 to understand the longitudinal trends in cash and equity compensation. A VP of Engineering in a Bay Area startup that has raised less than twenty-five million dollars earned 33% more in 2021 than 2010. 2021 Equity. Cash Change. A nice bump. 2010 Equity. Equity Change.

Compensation 263

Compensation Startup Engineering Trends 263

SaaStr

JULY 18, 2022

Startups: THIS IS THE WORSE RECESSION SINCE THAT TULIP THING I READ ABOUT IN SCHOOL pic.twitter.com/qGKuXLchFQ. Cloud spending is still expected to grow even faster in 2022 than 2021 , from 18.4% growth in 2021 and expected growth of 22.1% Gartner: businesses will spend $100,000,000,000 more on software in 2023 than 2022.

Venture Capital 323

Venture Capital Software Cloud Forecasting 323

SaaStr

JUNE 14, 2021

The biggest change is that growth investors, the folks that invest at $10m+ ARR, are often now looking for SaaS startups to be tripling at this stage — not doubling. Not for the premium prices, at least. To merit those crazy high valuations we seem to be seeing almost every day? Or at least growing 150% or so. Is that fair?

Startup 241

Startup SaaS Cloud Pricing 241

SaaStr

FEBRUARY 2, 2024

The backup of 2020 was great, 2021 comes in and somehow we have 600 unicorns and everyone can burn 500 million a year or have huge sales teams. And then at the end of 2021, all of a sudden the music stopped. We just leaned on our existing customer base and relied more on price increases and NRR.

Sales Recruiting 277

Sales Recruiting Trends Sales Hiring Software Review 277

SaaStr

APRIL 19, 2024

How do you reverse-engineer your first million as a SaaS startup founder? He’s invested in startups as a VC since 2013 and has 10x his fund. His first million came from a startup making implantable batteries from nanomaterials that sold for $50M after 12.5 That’s how you approach pricing until you’re really big.

Engineering 236

Engineering Business Model Pricing Scaling 236

SaaStr

JUNE 27, 2022

They’ve since opened new hubs in Austin and Dublin and in 2021, hired Employee number 200. Maintain transparency in pricing for your customers. The post eCommerce API Startup to Unicorn With Shippo Co-Founder and CEO Laura Behrens Wu (Pod 567) appeared first on SaaStr.

Sales Hiring 190

Sales Hiring Startup Scale Content Marketing 190

Tom Tunguz

DECEMBER 31, 2023

Record inflows into tokens fuel all-time highs in Bitcoin, Solana, & higher performance L1s who offer better price/performance to market. US VC investment falls from $275b in 2022 to $200b in 2023 & sustains at about $200-220b in 2024 as LP interest in venture attenuates after the euphoria in 2020 & 2021. 3 KnowBe4 4.6

AI Search 219

AI Search AI Scale Headcount 219

SaaStr

JANUARY 30, 2024

It’s a SaaS startup that basically fell out of product-market fit after the 2021 boom … but has enough revenue and high enough NRR to keep going. In some ways, NRR Zombies are outputs of the actions of 2023, especially for venture-backed startups. They raised prices. It’s the “NRR Zombie”. What’s that?

Headcount 212

Headcount Finance Startup Trends 212

SaaStr

MARCH 1, 2024

TJ Nahigian, co-founder and Managing Partner of Base10 Partners, and Luci Fonseca, Partner, deep dive into the current GenAI landscape, incumbents vs. startups, and the six questions founders should ask themselves to drive value from GenAI. Startup platforms are OpenAI, Hugging Face, and Cohere. How are they doing this?

Generative AI 232

Generative AI Outsourcing Services AI Software Review 232

SaaStr

FEBRUARY 26, 2022

No, this SaaS Crash is so tough on VCs and public market investors because the market was just so, so high for Cloud stocks from mid-2020 to late 2021: You can see above in the BVP Nasdaq Cloud Index that while these are still Great Times in SaaS, they aren’t the crazy days that peaked around Thanksgiving 2021. Especially now.

Venture Capital 362

Venture Capital Cloud Startup SaaS 362

SaaStr

OCTOBER 15, 2022

Let’s all be clear, 2021 was insane: * SPACs worth billions with no revenue * Multiples magically tripled * Fintechs with 10% GMs worth same as 80% GMs * #5 in market got same premium as #1 * Growth stage seen as free money * Seed VCs bought in $3B-10B rounds vs sell. Not literally, but no one seems willing to IPO at today’s prices.

Startup 235

Startup Cloud Growth Marketing SaaS 235

Tom Tunguz

OCTOBER 14, 2023

Within the last few weeks, we’ve seen two significant exits in Startupland, the first new pricing information we received in many quarters. But the market has changed enormously since the market set those prices. Averaged together, they imply startups are 2.5% Klaviyo was the first half for IPO in at least a year.

Acquisition 225

Acquisition Pricing Enterprise Startup 225

SaaStr

APRIL 3, 2022

Most VC funds “mark-up” their investments to the price of the last round and … just sort of leave it there. But they generally have a lot of lattitude on when to continue to carry an investment at the last round price. Some VCs still feel like geniuses if they had big mark-ups in 2021. Others are more worried.

Technical Review 282

Technical Review Startup Investment Pricing 282

SaaStr

MARCH 11, 2023

One is how certain startups will just “grow into their valuations”. Today, a $20m ARR startup growing 100% that magically raised at $1B in 2021 might fetch only a $200m valuation, for example. To create a good exit, you’re likely going to have to grow into 2x-3x that big round price.

Banking 235

Banking Startup Acquisition Pricing 235