Thu. Jan 20th, 2022

The flow of capital in SaaS there is more and more splitting. There are the “haves” (publicly traded companies with more than 30% revenue growth) and the “have nots” (all others) of B2B software.

The chart below shows how drastically the “haves” have separated from the rest. With an average EV/revenue multiple of +28.5x for companies that grew more than 50% and +9.9x for companies that grew 30%-50% since 2019, compared to only +2.9x for companies that grew 10% -30% grew.

The real trick is to identify why certain companies are “haves” and how they remain so. In other words, what about companies like Zoom, Datadog, Monday.com and Asana boosting their outsized valuations? More importantly, are there any strategies or tactics that management teams can use to optimize for these kinds of results?

Growth in EV/yield over time

Growth in EV/revenue over time. Image Credits: OpenView Partners

Recent research shows that there are three key steps to becoming a “have”:

  • Continued execution against large and growing market opportunities.

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