article thumbnail

Do PE Acquisitions of Public Startups Imply We've Hit a Pricing Bottom?

Tom Tunguz

Since these transactions’ details are public, we can use them to infer how the private software market values companies. But no relationship exists between the Nasdaq’s price level & multiples. The more free cash the company produces, the lower the acquisition multiple. Growth Rate. FCF Margin. Ping Identity.

article thumbnail

Acquisitions — If You Do Sell, Try to Make Sure It’s At a Local Maximum

SaaStr

And it reminded me of a stretch when over 6 months or so, I met with a series of entrepreneurs that turned down pretty attractive acquisition offers, relatively early in their lifecycle: SaaS Co. #1 At other times, the price can be crappy. Every Big Tech company has a budget for sub-$100m acquisitions. Vaguely. But Not Really.

Insiders

Sign Up for our Newsletter

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

article thumbnail

What the $6B Coupa Acquisition Means for Software Startups

Tom Tunguz

The acquisition is notable for three reasons. First, the premium to the public price is 31%. Third, it’s the most substantive acquisition to announce this year after Figma’s announced its sale to Adobe. The M&A market may be thawing a bit. This morning, Coupa announced its sale to Thoma Bravo for $6.2b.

article thumbnail

Zendesk and Anaplan: A Tale of Two Very Similar, And Very Different, $10B SaaS Acquisitions

SaaStr

Not only were the prices basically identical, but so were a few other facts: Both had a nice, roughly similar premium price (usually necessary to get a deal done to acquire a public company): Anaplan a 41% premium to their trade price, and Zendesk 34%. A deal that is fair & makes sense when markets are turbulent and worried.

article thumbnail

Can You Still Get Acquired for a Decent Price if Growth Has Slowed or Even Stopped? Yeah, Sometimes

SaaStr

So the other day a CEO reached out to me about advice on an acquisition. In that case, sometimes, if a startup is at least at scale, say $10m+ ARR, and knows the market and customers, a BigCo will still buy them at a multiple more appropriate for a startup growing far faster. Yeah, Sometimes appeared first on SaaStr.

Pricing 218
article thumbnail

The Startup M&A Market Fell 94% Year over Year - But One Segment is Thriving

Tom Tunguz

The US startup M&A market in Q4 2022 was one of the quietest in the last 20 years. The total quantity of acquisitions demonstrated greater resilience shrinking by 56%, while the median acquisition value tumbled from $81m to $22m (-72%). It’s no surprise Q4 2022 acquisition value plummeted. in Q4 2022.

Startup 282
article thumbnail

The Implications of Increased Regulatory Scrutiny for Startup Acquisitions

Tom Tunguz

Similar questions have surrounded Microsoft’s acquisition of Blizzard; The US Department of Justice seeks to unwind the Google/DoubleClick merger ; British regulatory bodies forced Facebook to reverse its Giphy acquisition. At what strike price? The FTC reportedly will sue to stop Adobe from acquiring Figma.