Valuation for a SaaS

searcher profile

September 14, 2023

by a searcher in Madrid, España

Hello.
We are about to begin due diligence on a SaaS company. What recommendation do you give for the valuation? EBITDA or ARR multiple? And if you can give us visibility of the multiples we would appreciate it.


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commentor profile
Reply by a searcher
from University of Southern California in Tampa, FL 33602, USA
Depends on the deal dynamics (growth, scale, margins, end-market, etc.), but seems very unlikely it'll trade on an EBITDA multiple. The exact multiple itself will completely depend on a multitude of those factors I stated before.

The larger the business, the faster the growth, the better the margins, the larger the competitive advantage, etc. will command a higher multiple; could potentially justify upper single digits ARR as long as there's a clear path to profitability
commentor profile
Reply by a professional
from Oregon State University in Kuna, ID, USA
Hi! If you haven't already, check out DealStats under the BVR Transactions icon at the top of the platform. DealStats has a ton of SaaS deals. https://www.searchfunder.com/bvr/sector/141
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