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SaaS Multiple "Shrinkage"
An article by • Published Mar 6, 2021

SaaS-mageddon

High growth software names have lost 8-'turns' of revenue multiples in two weeks as the double-whammy of higher rates and 're-opening rotation' overwhelm anything else What the market giveth' the market can taketh' away just as easily. Software revenue multiples expanded during COVID-related shutdowns as they were seen as islands of growth in a no-growth world. With the world re-opening, fund flows are reversing
"High Growth" SaaS Sampling:
15 names, $150 billion market capitalization lost, 7.8x of revenue multiple lost
Current: $650 billion enterprise value on $19.5 billion revenue = 30.8x
Feb 19: $800 billion enterprise value on $19.5 billion revenue = 40.9x
Snowflake ($SNOW) maintains the loftiest valuation at 80x this year's guide
Valuation Multiples at March 4, 2021
Valuation Multiples at February 19, 2021

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