The public SaaS market has fallen as dramatically as it rose, and we are back to where we started pre-COVID. SaaS multiples in January of 2020 were at 12x. Then COVID, low interest rates, and massive fiscal and monetary stimulus drove SaaS valuations to 22x trailing revenues in January of 2021. Today, we are back at 12x revenues which is well above the pre-COVID 8-year revenue multiple of 8x. The SPAC market which also took advantage of this market exuberance has completed 176 deals valued at $437B which are now down 46%. Over the last two years, private market transaction valuations have also risen, but not nearly as much as public markets. During COVID, the bulk of AGC's private SaaS deals were at 6-15x, while the public markets pulled away to reach 13-30x pre-correction. So, happy to say that we are seeing very little change in private valuations so far. The public market premium has dropped from 77% during COVID down to 51% today, still not close to the 31% median spread between private and public tech deals over the last 15 years. The super high priced private minority deals that took their cue from public markets will come down, as will the lower quality SaaS companies that were getting free passes on major flaws and in some cases crippling imperfections.
© In the U.S., America’s Growth Capital, LLC dba AGC Partners, member FINRA/SIPC. In Europe, America’s Growth Capital Europe, LLP (Appointed Representative Alternatives St. James, LLP which is authorized and regulated by the Financial Conduct Authority). America’s Growth Capital Europe, LLP is a Limited Liability Partnership incorporated in England and Wales (OC368580). Its registered address is 6th Floor, 9 Appold Street, London EC2A 2AP. The testimonials contained herein may not be representative of the experience of other customers or clients. Testimonials are no guarantee of future performance or success. Deals marked with an “*” are non-AGC deals.
