B2B SaaS: 2023 Valuation Multiples

Software-as-a-Service companies – and B2B SaaS in particular – have benefitted from the increased digitalisation of the workforce brought about by the pandemic, leading to a huge number of companies adopting cloud or subscription based solutions to manage their operations and people.
On the public markets, SaaS stocks are popular among investors, and that popularity has shifted into overdrive as a result of the COVID emergency. Perhaps most notably, B2B SaaS solutions achieved stellar valuations driven by the mass shift to remote working.
B2B SaaS refers to companies that provide software (app, extensions, add-ons etc.) directly to other businesses as a service, as opposed to B2C, which sell their software directly to individual consumers.
The seemingly relentless growth of the sector, however, came to a halt at the end of 2021—together with public markets and the broader tech sector—with industry giants announcing layoffs and market caps in the SaaS space slashed by 57% on average, which led many to call 2022 the year of the SaaS Crash.
According to Software Equity Group, this is largely a correction due to an incredibly strong demand for riskier stocks brought by a favourable macroeconomic outlook and amplified by the pandemic-induced rate of digitalisation. “As macroeconomic indicators began to decline in 2022—they write in their 2023 SaaS report—the flight to safer investments and aversion to risk has caused the multiples for cash burning SaaS companies to falter.”
But in order to understand just how much these conditions influenced B2B SaaS company valuations, we analysed public market data going back three full years, which enabled us to compare current valuation multiples with their pre-pandemic counterparts.
Our research is based on the SEG SaaS Index, which lists over 100 publicly traded companies that “primarily offer solutions via the cloud and/or through a subscription or transaction-based model”.
After screening for organisations that record 100% of their revenues from business-to-business sales, 66 companies within the SEG SaaS Index were identified as part of the B2B SaaS cohort.
Revenue Multiples | EBITDA Multiples | ||||||||||||||||||||||||
Sector | Company | 1Q20 | 2Q20 | 3Q20 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | 1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q20 | 2Q20 | 3Q20 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | 1Q22 | 2Q22 | 3Q22 | 4Q22 |
Education | 2U | 2.3x | 3.7x | 3x | 3.4x | 3.7x | 3.2x | 2.9x | 1.9x | 1.6x | 1.5x | 1.4x | 1.3x | 130.4x | 224.3x | 196.4x | 43.8x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Payments | ACI Worldwide | 3x | 3.2x | 3.2x | 4.2x | 4.3x | 4.3x | 3.7x | 3.6x | 3.5x | 2.9x | 2.7x | 2.3x | 13.8x | 12.9x | 13.1x | 17.2x | 17.5x | 16.3x | 14.8x | 15x | 13.2x | 10.4x | 9.8x | 7.9x |
Analytics | Altery | 13.8x | 23.3x | 15.4x | 16.4x | 15x | 10.7x | 9.6x | 9.3x | 7.5x | 7.5x | 7.3x | 5.2x | 375.4x | 955.3x | 214.6x | 358.9x | 329.4x | 339.3x | N/A | N/A | N/A | N/A | N/A | N/A |
Analytics | Amplitude | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 43.8x | 20.1x | 9x | 7.2x | 6.1x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Other | Anaplan | 11x | 15.8x | 21.2x | 23.4x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Other | Appian | 9.2x | 11.9x | 14.7x | 36.9x | 39.6x | 25.8x | 22.4x | 17.4x | 10.5x | 8.8x | 8x | 6x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Other | Asana | N/A | N/A | 23.9x | 22.9x | 24.5x | 21.6x | 46.2x | 58.5x | 24.8x | 9.6x | 7.8x | 6.6x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Planning | Atlassian | 21.4x | 26.9x | 25.7x | 31.9x | 31.7x | 28.8x | 40.3x | 44.2x | 31.4x | 18.9x | 20.9x | 11.8x | 75.4x | 83.1x | 84.3x | 110.2x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Software | AvidChange | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 18.1x | 6x | 4.6x | 4.2x | 4.4x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Communications | Bandwidth | 5.5x | 10.5x | 13.6x | 11.7x | 12x | 8.5x | 6.7x | 4.4x | 3.2x | 1.7x | 1.4x | 1.5x | 3399.7x | 537.9x | 311.6x | 493x | 504.8x | 195.7x | 119.5x | 71x | 39.1x | 24x | 26.9x | 32.4x |
Healthcare | Benefitfocus | 1.3x | 1.5x | 1.6x | 2x | 2x | 2x | 1.8x | 1.7x | 1.8x | N/A | N/A | N/A | 90.4x | 55.9x | 27x | 22.9x | 22.6x | 16.5x | 16x | 28.4x | 42x | N/A | N/A | N/A |
Payments | Bill.Com | 14.3x | 41.2x | 44.1x | 56.4x | 60.8x | 60.3x | 81.7x | 92.3x | 50.7x | 23.4x | 21.8x | 15.7x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Other | Blackbaud | 3.6x | 3.6x | 3.6x | 3.6x | 4.3x | 4.4x | 4.4x | 4.6x | 4.6x | 4.1x | 3.9x | 3.8x | 26.3x | 25x | 24.2x | 25.1x | 29.5x | 31.6x | 34.2x | 36.8x | 39.4x | 39.2x | 39.9x | 44.2x |
Payments | Bottomline | 3.5x | 4.8x | 4x | 5x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 28.9x | 48x | 35.8x | 44.9x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Customer Engagement | Braze | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 31.5x | 18.2x | 10.8x | 11.8x | 6.5x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Human Capital Management | Ceridian | 9.1x | 14.4x | 15x | 19.4x | 17.2x | 16.5x | 18.3x | 18.9x | 11.3x | 8.7x | 8.6x | 8.8x | 64.5x | 117.1x | 131.5x | 286.7x | 254.8x | 479.5x | 1853.4x | N/A | 500.8x | 542.4x | 311.3x | 250.9x |
Analytics | Clearwater Analytics | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 16.7x | 12.8x | 10.7x | 9.5x | 11.1x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 196.1x | 1901.2x | N/A |
Human Capital Management | Cornerstone | 3.1x | 5.7x | 5x | 5.3x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 32.4x | 61.5x | 39.8x | 41.7x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Analytics | Definitive Healthcare | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 28.3x | 17.9x | 16x | 15.2x | 8.8x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 92.6x | 90.8x | 105.5x | 163x | 100.2x |
Software | DigitalOcean | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 23.6x | 13.9x | 9.7x | 8.9x | 6.6x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 133.2x | 80.8x | 69.9x | 68x | 43.1x |
Other | Domo | 1.6x | 5.2x | 6x | 9.7x | 9.4x | 9x | 11.7x | 10.9x | 5.8x | 4.2x | 3.5x | 1.9x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Ai | Dynatrace | 12.8x | 20.2x | 19.1x | 18.8x | 21.7x | 21x | 24.2x | 24.4x | 15.3x | 12.2x | 10.9x | 9.8x | N/A | N/A | 95.4x | 87x | 100.3x | 96.4x | 121.6x | 135.8x | 96.3x | 81.6x | 81x | 78.1x |
Other | Fastly | 7.9x | 34.8x | 36.1x | 33.5x | 31.2x | 20.6x | 16x | 15.1x | 9.4x | 5x | 4x | 3x | -111281x | -553209.4x | -621436.2x | -662.6x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Ai | Five9 | 13.3x | 19.4x | 21x | 26.8x | 26.3x | 24.5x | 24.1x | 18.4x | 13.9x | 11.1x | 10.1x | 6x | 162.1x | 328.3x | 367.8x | 745.2x | 785.8x | 951.4x | 835.4x | 7002.6x | N/A | N/A | N/A | N/A |
Customer Engagement | Freshworks | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 25.8x | 11.7x | 8.1x | 6.4x | 6x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Healthcare | Health Catalyst | 5.1x | 5.5x | 8x | 9.5x | 10.7x | 11.5x | 11.9x | 9.4x | 5x | 2.5x | 1.9x | 1.4x | -36.8x | -41.5x | -63.4x | -131x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Healthcare | Healthstream | 2.5x | 2.3x | 2x | 2.6x | 2.9x | 3.1x | 3.5x | 3x | 2.7x | 2.2x | 2.5x | 2.7x | 13.8x | 11.8x | 10.3x | 13.9x | 15.3x | 17.5x | 19.3x | 17.1x | 15.4x | 12.3x | 14.2x | 15x |
Other | Hubspot | 7.1x | 12.5x | 15.5x | 19.8x | 21.9x | 23.9x | 28.2x | 30.6x | 16.9x | 11.4x | 9.3x | 7.9x | 50.4x | 93x | 123.6x | 114.8x | N/A | N/A | N/A | N/A | N/A | 1583.4x | N/A | N/A |
Software | Informatica | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 8.2x | 5.9x | 4.7x | 4.9x | 4.1x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 29.8x | 26x | 23.9x | 28.9x | 30.7x |
Software | Intapp | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 6.8x | 5.3x | 5x | 3.4x | 4.6x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Supply Chain Management | Kinais | 9.3x | 16.5x | 16.7x | 16.2x | 14.5x | 12.6x | 16x | 16.4x | 12.9x | 9.7x | 9.4x | 8.8x | 43x | 66.9x | 74.8x | 100.2x | 88x | 97.7x | 193.5x | 201.3x | 146x | 61.8x | 72.2x | 68.4x |
Ai | Medallia | 6x | 7.6x | 8.5x | 10.4x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Security | Mimecast | 5x | 5.7x | 6.2x | 7.3x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 31x | 32.9x | 32.2x | 34.8x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Payments | Model N | 4.9x | 7.2x | 7.1x | 7.4x | 8x | 7.2x | 6.3x | 5.8x | 4.5x | 4.2x | 4.9x | 6.2x | 38.2x | 57.9x | 74.8x | 80.2x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Analytics | New Relic | 4x | 6x | 4.7x | 5.8x | 5.6x | 5.6x | 6.7x | 8.9x | 5.8x | 4x | 4.5x | 4.2x | 49.3x | 77.4x | 62.6x | 78x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Security | Okta | 24.8x | 38.4x | 37.8x | 41.9x | 38.9x | 38.2x | 36.6x | 30.8x | 21.5x | 10.3x | 9.3x | 4.9x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Other | Pagerduty | 6x | 10.6x | 9.3x | 15.4x | 15.9x | 13.7x | 13.3x | 12x | 9x | 7.1x | 6.5x | 5.5x | -61.7x | -117.9x | -109.4x | -190.6x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Security | Palo Alto Networks | 4.7x | 6.6x | 6.6x | 9.6x | 9.2x | 8.8x | 9.2x | 11.2x | 10.7x | 9.8x | 9.3x | 8.4x | 118.3x | 211.3x | 204.1x | 295x | 414.2x | 935.3x | N/A | N/A | N/A | 4120.8x | 535.6x | 218.9x |
Human Capital Management | Paycom Software | 14.7x | 22.4x | 21.9x | 30.9x | 27.4x | 24x | 29.9x | 28.8x | 18.5x | 15x | 16.9x | 14.5x | 38.6x | 64.6x | 68.2x | 108.6x | 96.2x | 83.9x | 102.2x | 100.3x | 60.5x | 47x | 52x | 43.1x |
Human Capital Management | Paycor | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 14.7x | 11.8x | 10.5x | 11.7x | 10.4x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 182.6x | 339.6x | N/A | N/A | 1282.4x |
Human Capital Management | Paylocity Holding | 8.3x | 13.7x | 15x | 18.9x | 17.7x | 16.1x | 21.2x | 21.3x | 15.2x | 12.6x | 15.5x | 12.8x | 42.9x | 73.6x | 83.1x | 105.8x | 98.9x | 98.8x | 133.7x | 133.6x | 99.5x | 81.3x | 98x | 87.9x |
Customer Engagement | Pegasystems | 5.9x | 8.3x | 9.9x | 10.7x | 10.6x | 9.6x | 9.4x | 8.3x | 6.4x | 3.6x | 2.9x | 2.6x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Security | Ping Identity | 6.2x | 10.2x | 10.1x | 9.6x | 9.8x | 7.6x | 7.3x | 7.6x | 5.9x | N/A | N/A | N/A | 47.7x | 109.3x | 120.1x | 173.4x | 176.8x | 1065.6x | N/A | N/A | N/A | N/A | N/A | N/A |
Security | Proofpoint | 6x | 6.3x | 5.7x | 7.3x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 1634.4x | 5826.1x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Insurance | PROS Holdings | -1.5x | -1.9x | -1.9x | -1.9x | 7.4x | 7.8x | 7.5x | 6.1x | 5.8x | 5.3x | 4.5x | 4.4x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Analytics | Qualtrics | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 22x | 14.7x | 6.9x | 5.1x | 3.9x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Security | Qualys | 9.2x | 10.9x | 10x | 12.2x | 10.4x | 9.7x | 10.2x | 12x | 11.1x | 10.8x | 11.3x | 9.3x | 26.1x | 29.7x | 27.1x | 32.8x | 28x | 32.6x | 33.9x | 39.5x | 36.5x | 28.8x | 31.2x | 26.5x |
Communication | Ringcentral | 19.5x | 24.8x | 22.9x | 29.6x | 29.3x | 21.4x | 17.8x | 14.7x | 10x | 4.4x | 3.3x | 2.6x | N/A | N/A | N/A | 818x | 808.9x | 225.8x | 1176.2x | N/A | N/A | N/A | N/A | N/A |
Software | Salesforce.com | 7.2x | 8.9x | 11.5x | 9.7x | 9.1x | 9.1x | 10.5x | 11.3x | 8x | 6.2x | 5.7x | 4.8x | 47.6x | 65.5x | 84.9x | 69.6x | 58.6x | 53.3x | 61.1x | 67.9x | 55.1x | 46.1x | 44.5x | 34.5x |
Software | Servicenow | 14.4x | 19.2x | 22.1x | 23.5x | 22.5x | 20.3x | 22.3x | 23.3x | 19x | 14.9x | 13.4x | 11.1x | 123.5x | 142.4x | 180x | 205.3x | 196x | 164.1x | 186.9x | 184.5x | 149.6x | 127.5x | 127x | 107.2x |
Software | Smartsheet | 16.1x | 18.5x | 16.6x | 22.7x | 20.9x | 17.4x | 19.1x | 16.6x | 12.4x | 7.7x | 6x | 5.6x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Security | Solarwinds | 6.8x | 7.2x | 7.8x | 6.1x | 7.9x | 7.9x | 4.9x | 4.2x | 3.7x | 4.2x | 3.7x | 3.5x | 16.4x | 17.4x | 19.1x | 16.2x | 22.3x | 24.7x | 17.8x | 16.2x | 15.2x | 15.5x | N/A | N/A |
Analytics | Sprinklr | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 8.1x | 5.1x | 4.9x | 4.3x | 2.9x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Communication | Sprout Social | 6.1x | 10.7x | 15.1x | 17x | 23.9x | 23.4x | 35.1x | 35.1x | 18.6x | 14.4x | 14.1x | 12.9x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Software | Sps Commerce | 4.9x | 8.2x | 8.2x | 11.7x | 11.5x | 10.1x | 11.7x | 13.7x | 11.1x | 9.5x | 10x | 10.2x | 23.7x | 39x | 38.1x | 53.3x | 52.3x | 46.4x | 53.2x | 64.8x | 53.3x | 45.4x | 47.9x | 46.9x |
Analytics | Teradata | 1.2x | 1.2x | 1.3x | 1.3x | 2.4x | 2.7x | 2.8x | 2.6x | 2.4x | 2.1x | 1.9x | 1.8x | 13.7x | 13.8x | 15.8x | 13.6x | 24.7x | 19.5x | 17x | 14.9x | 12.7x | 11.5x | 12.5x | 12.4x |
Analytics | The Trade Desk | 12.3x | 27.3x | 32.6x | 44.6x | 43.5x | 33.2x | 34.9x | 37.7x | 28.5x | 18.9x | 20.2x | 15.5x | 60.9x | 195.2x | 202.9x | 215.8x | 210.2x | 171.5x | 141.7x | 143.5x | 204.2x | 169.3x | 327.2x | 606.9x |
Education | Tyler Technologies | 10.3x | 12.2x | 12x | 15.2x | 14.9x | 14.8x | 16.4x | 15.6x | 12.2x | 9x | 8.9x | 7.9x | 48.7x | 56.3x | 53.7x | 66.9x | 64.8x | 64.3x | 74.6x | 74.7x | 61.1x | 44.9x | 44.1x | 38.1x |
Security | Varonis Systems | 7.5x | 10.4x | 13.2x | 17.5x | 19.4x | 16.1x | 17.7x | 16.2x | 9.8x | 7.7x | 6x | 4.3x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Biotech | Veeva Systems | 20.2x | 28.3x | 31.9x | 28.7x | 27.9x | 25.8x | 28.1x | 23.9x | 17.2x | 13.6x | 14.5x | 11.2x | 72.9x | 103.6x | 118.2x | 107.1x | 100.2x | 90.2x | 97.3x | 82.4x | 59.7x | 49x | 57x | 46.5x |
Customer Engagement | Verint Systems | 1.4x | 1.5x | 1.6x | 2.1x | 3.8x | 3x | 2.7x | 2.8x | 3x | 4.3x | 3.8x | 3.3x | 10x | 10.9x | 10.4x | 13.7x | 27.7x | 24.3x | 21x | 22.2x | 22x | 31.8x | 31.3x | 27.5x |
Software | Weave | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 10.5x | 4.2x | 1.7x | 1.7x | 1.4x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Customer Engagement | Zendesk | 8.4x | 11.1x | 12.4x | 16.4x | 16.7x | 15.3x | 13x | 10.2x | 10.3x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Security | Zi | 2.7x | 3.3x | 2.9x | 3.7x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 19x | 22.6x | 18.6x | 21.6x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Security | Zscaler | 20.8x | 35.5x | 42.2x | 54.7x | 49.3x | 42x | 49.6x | 57.4x | 39.7x | 22.8x | 20.7x | 15.7x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Payments | Zuora | 2.8x | 4.6x | 3.6x | 5x | 5.2x | 5.5x | 5.9x | 6.9x | 5.1x | 3x | 2.4x | 1.9x | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
The most represented sector was Cybersecurity (10 companies), followed by Payments (5), Analytics (4) and Human Capital Management (4).
Source: SEG
“Other” is comprised of 12 companies, which included Biotech, Insurance, Supply Chain Management and Planning, among others.
To calculate the median multiples across the cohort, and how these are distributed, we used Enterprise Value, Revenues and EBITDA data extrapolated from YCharts.com.
B2B SaaS Valuation Multiples
The median EV / Revenue multiple for public B2B SaaS businesses more-than-doubled throughout 2020, from 6.5x (Q1 2020) to 15x (Q1 2021). This refers to the Trailing Twelve Months (TTM) Revenue of the companies in the cohort.
However, after stalling between 12x and 15x throughout all of 2021, Revenue multiples for B2B SaaS companies declined rapidly and across the board throughout all of last year, with the data-point for Q4 2022 well below pre-pandemic levels, at 5.8x.
Source: SEG
B2B SaaS revenue multiples followed a trend comparable to that of its counterparts in the broader SaaS sector.
The quartiles analysis shows how the increase of variance, especially in the upper quartiles, goes hand in hand with positive economic conditions and investor sentiment. As soon as 2022 starts, along with high-inflation, looming recession indicators and skyrocketing energy prices, the top performers in terms of multiples can no longer command such a high valuation premium compared to their revenue, with variance decreasing tenfold by Q4 2022.
Source: SEG
In the chart above, the lines indicate the range of EV/Revenue multiples in our cohorts, while the boxes highlight the Interquartile Range (IQR), which is where the median 50% of the cohort ranks based on their valuation multiple.
The SaaS space—and the B2B subsector in particular—are known for highly rewarding profit-making companies, which are still only a fraction of the total: about a third of the cohort used for this analysis.
Shooting up from just over 40x to nearly 100x between Q1 2020 and Q1 2021, median EBITDA multiples anticipated their Revenue counterparts, beginning to decrease steadily from the second quarter of 2021.
In Q4 2022 the median EBITDA multiple for B2B SaaS companies in the cohort was 44.2x, just over pre-pandemic levels.
Source: SEG
Differently from what we saw with Revenue multiples, however, overall variance of EBITDA multiples has actually grown throughout last year, especially in the upper quarter of the cohort.
This goes to show how companies that are able to prove their profitability even through unfavourable macroeconomic conditions can still command a premium on their valuation.
Source: SEG
In the chart above, the lines indicate the range of EV/EBITDA multiples in our cohorts, while the boxes highlight the Interquartile Range (IQR), which is where the median 50% of the cohort ranks based on their valuation multiple.
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