The SaaS (Software-as-a-Service) space is evolving fast. With more players entering the game and market conditions constantly shifting, acquisition trends have become a major talking point. For founders, investors, and strategic buyers, understanding the latest benchmarks and valuations is no longer a luxury—it’s a necessity.
1. Median EV/Revenue multiple for SaaS acquisitions was 6.8x in 2023
What this tells us
When a SaaS company is acquired, one of the most common ways to value it is using the EV/Revenue multiple (Enterprise Value divided by Revenue). In 2023, the median number for SaaS deals was 6.8x. That means if your SaaS startup makes $10 million in revenue, it might be worth around $68 million to a buyer.
Why it matters to you
Understanding this benchmark helps you set realistic expectations. If you’re a founder considering an exit or a buyer exploring investments, 6.8x is your north star for standard deals. But it’s not just about knowing the number—it’s about understanding what drives it.
Revenue quality, churn rates, growth, and even team strength all play a role. If you can’t explain why your multiple should be higher than 6.8x, you might struggle during negotiations.
What you can do
- Keep your revenue clean. That means recurring, predictable, and with low churn.
- Document your revenue streams clearly for buyers.
- Highlight long-term contracts or subscription terms that stretch beyond a year.
Focus on getting your core metrics in top shape. The stronger they are, the more confident you can be pushing for a higher multiple.
2. Top quartile SaaS deals exceeded 10x EV/Revenue multiples in 2023
What this tells us
While the average deal comes in around 6.8x, the top performers hit over 10x. That’s a big jump. These are the companies investors are eager to buy—and pay a premium for.
Why it matters to you
Getting into the top 25% isn’t about luck. It’s about clear, consistent execution across your metrics. Investors pay high multiples for SaaS companies that show strong growth, solid retention, and efficient operations.
These are often product-led companies with strong brand recognition, viral adoption, or unique tech. They’ve also likely achieved scale with little dilution, giving founders a bigger payday.
What you can do
- Focus on sustainable growth. Triple/triple/double/double/double growth still wins buyers.
- Invest in branding and marketing to show up strong in your niche.
- Create a killer onboarding experience to boost conversion and retention.
Remember, this isn’t about vanity—it’s about control. The better you perform, the more you control the exit terms.
3. Median EV/EBITDA multiple for SaaS M&A deals was 25x in 2023
What this tells us
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is another key way to value SaaS companies, especially those at scale. A 25x multiple means a company with $4M EBITDA could be valued around $100M.
Why it matters to you
This stat is especially important for profitable SaaS companies. EBITDA-based valuations are often used in deals involving private equity or larger strategics who care deeply about cash flow.
The good news? If you’re profitable, buyers are likely to reward you. The bad news? If you’re not managing your costs well, you could lose millions in valuation.
What you can do
- Monitor operating efficiency carefully.
- Shift from “growth at all costs” to “smart, efficient growth.”
- Reduce customer acquisition costs while increasing LTV.
If you’re close to profitability or already there, keep that engine running. It may just be the thing that puts you into that 25x bracket.
4. Private Equity accounted for over 50% of all SaaS acquisitions in 2022
What this tells us
Private equity (PE) firms are now major players in SaaS M&A. They’re buying up startups, rolling them up, and finding operational efficiencies to improve margins.
Why it matters to you
You’re no longer just building for other SaaS companies to acquire you. You need to be ready for PE firms who have a different playbook. They focus on cash flow, team efficiency, and long-term enterprise value.
PE buyers often look for companies that have solid revenue, room for operational improvements, and can bolt onto their current platforms.
What you can do
- Start thinking like a PE buyer. Can your business scale efficiently? Can you reduce costs?
- Document your operations well. PE firms love companies they can understand and optimize.
- Build a clean cap table and show that you’ve been thoughtful with capital.
If you’re raising a new round or thinking about an exit, don’t just pitch VCs. Get PE firms on your radar too.
5. 68% of SaaS M&A deals target companies with under $50M ARR
What this tells us
Most SaaS deals aren’t unicorn-sized. Nearly 7 out of 10 acquisitions involve companies with less than $50 million in annual recurring revenue.
Why it matters to you
It’s easy to think your company needs to be huge before you can sell. That’s not true. Acquirers are actively seeking out smaller, nimble SaaS businesses with strong growth potential.
You don’t need to hit $100M ARR to exit. If your metrics are tight and your niche is valuable, buyers are interested.
What you can do
- Build a clear niche. Specialization increases your value.
- Keep your churn low. Small SaaS companies with stable revenue are more attractive than big ones with holes.
- Start conversations early. Don’t wait until you’re “ready.” The right buyer may be looking now.
Being small is not a disadvantage—it’s often a sweet spot for many buyers.
6. 41% of SaaS acquisitions are cross-border
What this tells us
Nearly half of all SaaS acquisitions happen across borders. That means companies in the U.S. are buying SaaS firms in Europe, Asia, and beyond—and vice versa.
Why it matters to you
Geography is no longer a barrier to being acquired. You don’t need to be in Silicon Valley or New York to get noticed. If your product is solid, your users are engaged, and your metrics are strong, you can attract buyers from around the world.
Global buyers are often looking for local market access, talent pools, or technology they can’t easily replicate in their home country.
What you can do
- Make your company “international-ready.” Use global-friendly payment gateways, have GDPR policies in place, and serve customers in different time zones.
- Get your financials in order—clean books make cross-border due diligence easier.
- Engage in global SaaS communities. Be visible on platforms like LinkedIn, Product Hunt, and SaaStr.
Being open to cross-border acquisition expands your opportunities—and your valuation upside.
7. In 2023, over 70% of SaaS acquisitions involved strategic buyers
What this tells us
Strategic buyers—other SaaS or tech companies—made up the majority of acquirers in 2023. These buyers aren’t just looking for revenue; they’re looking for a fit. They want to plug your product into their ecosystem and grow their existing business faster.
Why it matters to you
Strategic acquirers often pay higher premiums than financial buyers. They value synergies like cross-selling opportunities, shared customers, or proprietary tech. If your product fills a gap in their roadmap, you’re in a strong negotiating position.
What you can do
- Map out which companies could benefit from your platform.
- Build partnerships early with potential acquirers.
- Showcase use cases that highlight synergy.
It’s not just about selling. It’s about becoming irresistible to the right company at the right time.
8. SaaS deals with >90% gross retention command a 2x valuation premium
What this tells us
Retention is king in SaaS. If you keep 90% or more of your revenue base month-over-month or year-over-year, buyers notice—and they pay more. A lot more.
Why it matters to you
High retention shows product stickiness and customer satisfaction. It also reduces the cost of growth, since you don’t have to replace lost revenue. Investors and buyers will gladly pay a premium for that kind of predictability.
What you can do
- Focus on onboarding. Make sure customers see value early.
- Add usage triggers to alert your team if customers disengage.
- Build a customer success team focused on expansion and renewals.
Churn is a silent killer. Nail retention, and you’ll unlock some of the highest multiples in SaaS.
9. Public SaaS companies traded at a median 8.5x revenue multiple in early 2021
What this tells us
Back in early 2021, public SaaS companies were riding a valuation high, with a median multiple of 8.5x revenue. This number has since come down, but it remains a key historical benchmark.
Why it matters to you
Buyers often benchmark private SaaS deals against public market valuations. If you’re aiming to sell, it helps to know where the public bar is set. When public valuations rise, private deals follow—and vice versa.
What you can do
- Track public comps in your niche (like ZoomInfo, HubSpot, or Snowflake).
- Align your KPIs (like growth rate and NRR) with those of leading public SaaS firms.
- Be ready to move when public markets are hot.
The tide lifts all boats—but only if your boat is ready to sail.
10. Over 60% of SaaS companies acquired were founder-led
What this tells us
Founders play a big role in building SaaS companies that get acquired. In fact, more than half of all acquired SaaS businesses still had the original founders in leadership.
Why it matters to you
Founder-led businesses often have a stronger culture, faster decision-making, and closer ties to customers. Buyers see that as a good thing. They’re betting on your leadership and your vision.
What you can do
- Embrace your role as a founder-CEO. Stay close to the product and your users.
- Don’t rush to hire a “professional CEO” unless the business truly needs one.
- Be prepared to stay on post-acquisition if needed—it could increase your deal value.
Your involvement adds value. Buyers aren’t just buying your code; they’re buying your leadership.
11. Product-led growth SaaS companies fetch 15–30% higher valuations
What this tells us
Companies that grow through product usage—rather than expensive sales teams—get better deals. Why? Because they scale faster, spend less, and prove product-market fit more clearly.
Why it matters to you
A product-led strategy isn’t just trendy—it’s financially rewarding. If users can try your product, see value fast, and upgrade themselves, your business becomes far more attractive to acquirers.
What you can do
- Offer a free trial or freemium tier.
- Invest in UX and onboarding so users hit their “aha” moment quickly.
- Use in-app prompts to nudge upgrades and track engagement.
Make your product your best salesperson. It can pay off big when the time comes to exit.
12. Rule of 40 compliance increases valuation by up to 40%
What this tells us
The Rule of 40 says your growth rate + profit margin should equal 40% or more. It’s a simple formula, but powerful. Investors use it to judge financial health and sustainability.
Why it matters to you
If you can balance growth with profitability, you become a dream target. You’re not just burning cash to grow—you’re growing wisely. That earns higher multiples and more buyer interest.
What you can do
- Track both top-line growth and EBITDA margin closely.
- Cut unnecessary spend, especially in bloated departments.
- Grow where it’s working—double down on efficient channels.
You don’t have to be perfect. Just aim for the 40% mark—and stay consistent.
13. Companies with >100% net dollar retention received median multiples of 11x revenue
What this tells us
Net dollar retention (NDR) over 100% means your existing customers are growing with you. They’re upgrading, buying more seats, or using more features. It’s one of the strongest signs of product value.
Why it matters to you
Investors love businesses that grow without acquiring new customers. It shows leverage, scalability, and low churn. That’s why companies with >100% NDR get multiples well above the average.
What you can do
- Add expansion features that grow with your customers.
- Build account management processes that drive upsells.
- Monitor usage data to identify upgrade triggers.
Retention isn’t just about keeping customers—it’s about growing them.
14. Cybersecurity and vertical SaaS saw highest deal volumes in 2023
What this tells us
Cybersecurity and vertical SaaS (industry-specific platforms like healthcare, legal, or construction software) led the pack in M&A activity last year. These sectors saw the most acquisitions because they’re viewed as resilient, niche-focused, and hard to replicate.
Why it matters to you
Not all SaaS businesses are valued equally. Buyers are chasing solutions that solve big, specific problems—especially in high-risk or regulated industries like cybersecurity or healthcare. These areas promise long-term demand, lower churn, and specialized revenue.
What you can do
- If you’re in a vertical, lean into it. Specialize your product even more.
- If you’re in cybersecurity, highlight how your platform reduces risk and meets compliance.
- Avoid being a generic tool. Buyers pay more for depth over breadth.
You don’t need to serve everyone. Serve someone deeply, and acquirers will notice.
15. 45% of SaaS deals involved companies with fewer than 100 employees
What this tells us
Almost half of all SaaS acquisitions target lean companies. You don’t need a massive headcount to be attractive. In fact, smaller teams are often seen as more agile, cost-effective, and product-focused.
Why it matters to you
You don’t have to scale headcount to scale valuation. Buyers care more about metrics, product quality, and customer success than how big your team is. A tight-knit group with strong results is often more appealing than a bloated org chart.
What you can do
- Build systems, not staff. Automate wherever possible.
- Hire generalists early. They can wear many hats and stretch resources.
- Show buyers you’ve built a capital-efficient company.
Big teams can come post-acquisition. For now, focus on outcomes, not optics.
16. Median time to acquisition post-Series B for SaaS firms is 3.8 years
What this tells us
On average, SaaS companies that raise a Series B get acquired within about four years. That means the clock starts ticking the moment you raise that round.
Why it matters to you
Investors expect liquidity. Once you raise Series B, the assumption is that your business is mature enough to scale toward an exit. If you’re not planning for that outcome, you might be caught off guard—or leave money on the table.
What you can do
- Start building acquisition relationships post-Series B.
- Get your data room in order early—don’t scramble at the last minute.
- Keep communication open with your board about exit timelines and strategy.
Series B isn’t just a growth milestone. It’s also the beginning of your acquisition runway.
17. Companies with ARR between $10M–$30M see median acquisition multiples of 5.7x
What this tells us
For SaaS firms with $10M to $30M in annual recurring revenue, the typical acquisition multiple sits just under 6x. This is the mid-market sweet spot where a lot of activity happens.
Why it matters to you
If you’re growing through this revenue band, buyers are likely watching. But valuation expectations need to be grounded. You might not hit a 10x multiple unless your metrics are outstanding.
What you can do
- Prepare for diligence. Mid-market buyers expect clean books and scalable systems.
- Optimize customer success to maintain healthy NRR and low churn.
- Consider bolt-on positioning. Could your platform complement a larger suite?
At this stage, you’re big enough to matter—but still small enough to be nimble. Use that to your advantage.
18. Growth rate above 40% leads to revenue multiples exceeding 10x
What this tells us
If your SaaS company is growing over 40% annually, you’re in elite territory. Buyers will often pay 10x revenue or more because you’re seen as a high-momentum asset.
Why it matters to you
Growth is one of the most important levers for valuation. Even if your product isn’t perfect, consistent and fast growth gives buyers confidence that there’s a big market opportunity.
What you can do
- Double down on what’s working. Don’t get distracted by shiny features.
- Track your growth rate monthly and adjust strategy quarterly.
- Align your team around key drivers like acquisition channels, sales velocity, or upsells.
Fast growth isn’t easy—but if you can sustain it, it pays off in a big way during M&A.
19. SaaS acquirers target companies with at least 70% gross margin
What this tells us
Gross margin shows how much money you keep after covering the cost to deliver your service. SaaS companies with at least 70% gross margins are seen as healthy, scalable, and efficient.
Why it matters to you
If your margins are below 70%, it raises red flags. Buyers might worry about your hosting costs, customer support load, or product delivery model. It could also signal a services-heavy business, which reduces SaaS valuation multiples.
What you can do
- Reduce cloud costs with better infrastructure planning.
- Move low-value support to self-serve channels.
- Avoid custom builds that require expensive dev time.
Focus on profitable growth. The closer you get to 80% gross margins, the more attractive you become.
20. Over 80% of SaaS acquisitions involved cloud-native platforms
What this tells us
Today’s buyers overwhelmingly prefer cloud-native SaaS products. These are built from the ground up to run in the cloud, not retrofitted from legacy systems.
Why it matters to you
Cloud-native platforms offer easier scaling, lower maintenance, and faster integration post-acquisition. They’re built to grow—and buyers love that. If your tech is still hybrid or on-premise, you’ll likely face valuation discounts.
What you can do
- Invest in cloud-first infrastructure. Think AWS, Azure, or GCP.
- Ensure your architecture supports multi-tenancy and high availability.
- Highlight your uptime, scalability, and deployment advantages.
Being cloud-native isn’t optional anymore. It’s a baseline for serious SaaS valuations.
21. Multiples have declined ~30% from 2021 peak due to interest rate hikes
What this tells us
Back in 2021, low interest rates created a frothy M&A market. Capital was cheap, so buyers paid sky-high multiples. Since then, rising interest rates have cooled the market, and average multiples have dropped around 30%.
Why it matters to you
You can’t price your company based on 2021 conditions. Buyers today are more cautious, more conservative, and less likely to stretch for mediocre deals. Expectations need to be reset.
What you can do
- Focus on fundamentals. Profitability and retention matter more than ever.
- Prepare for more negotiation. Expect buyers to push harder on price.
- Be patient—strong metrics will still command strong offers, even in a tighter market.
Markets shift, but great companies always find buyers. Make yours one of them.
22. 65% of SaaS M&A is focused on AI/ML or data platforms post-2022
What this tells us
Since 2022, nearly two-thirds of SaaS acquisitions have centered around AI, machine learning, or data analytics platforms. This trend shows where buyer interest is heading—and it’s heavily toward intelligent software.
Why it matters to you
The rise of AI isn’t just hype—it’s changing what buyers look for. They want companies with proprietary data, embedded intelligence, and systems that automate decisions. If you’re in SaaS and not integrating AI, you could be left behind.
What you can do
- Add AI features to automate tasks or improve user insights.
- Train models using your unique user behavior data (ethically and legally).
- Use ML to recommend actions or optimize workflows inside your platform.
Even small AI features can raise perceived value and future-proof your product. Buyers want tomorrow’s tools, not yesterday’s software.
23. Private SaaS acquisitions have a median valuation of $120M
What this tells us
The typical private SaaS company that gets acquired is valued around $120 million. This is the median, meaning some deals go far higher—but it also signals a mature company with solid traction.
Why it matters to you
This benchmark helps you think clearly about what kind of revenue, growth, and team size may lead to a nine-figure exit. It also reinforces that exits don’t have to be unicorn-sized to be meaningful.
What you can do
- Create financial models that scale toward this range.
- Aim to hit $15M–$25M ARR with healthy retention and margins.
- Show buyers a clear path to doubling their investment post-acquisition.
You don’t need to be a billion-dollar company. Focus on building a valuable, well-run one—and $120M may not be far off.
24. Founder ownership at exit averages 38% in SaaS M&A deals
What this tells us
When SaaS companies are sold, founders usually still own about 38% of the company. That’s a significant stake—especially at exit—but also shows the effects of dilution from fundraising rounds.
Why it matters to you
Your decisions during each funding round affect your payday at the finish line. Founders who give away too much equity early might have impressive companies… but disappointing exits.
What you can do
- Negotiate for founder-friendly terms in early rounds.
- Use SAFE notes or convertible debt to delay dilution when possible.
- Delay funding until you have traction—more leverage equals better terms.
You don’t just want to sell a big company. You want to own enough of it when you do.
25. Acqui-hire deals make up ~10% of SaaS exits under $20M
What this tells us
About 1 in 10 smaller SaaS exits are acqui-hires—where the acquirer is mostly buying the team, not the product. These deals often happen when the product doesn’t scale, but the team is talented and in demand.
Why it matters to you
Acqui-hires are a safety net—but not the goal. They often come with lower payouts and earn-outs tied to employee retention. Still, they can be a soft landing and open the door to larger opportunities.
What you can do
- Hire great people and build a strong culture—it raises your acqui-hire value.
- Document your tech stack well to make transitions easier for buyers.
- Build relationships with bigger SaaS firms in case a strategic acqui-hire makes sense.
If you must take the acqui-hire route, make sure it’s a springboard, not an ending.
26. Over 55% of SaaS deals are structured with earnouts or contingent payouts
What this tells us
Most SaaS acquisitions aren’t all-cash upfront. Instead, over half include earnouts—payments based on future performance—or other contingency terms. This helps buyers manage risk but also means your final payout may vary.
Why it matters to you
You need to prepare for a deal structure that stretches beyond the closing date. If you overpromise or miss your earnout targets, your valuation might shrink post-deal.
What you can do
- Be conservative with your projections. Underpromise and overdeliver.
- Structure earnouts around metrics you can control (like renewals, not market share).
- Negotiate for partial guarantees or floor payments to limit downside risk.
Earnouts are common—use them to align incentives, not as wishful thinking.
27. Median SaaS M&A deal size dropped to $90M in 2023 from $145M in 2021
What this tells us
In just two years, the typical SaaS acquisition shrank in size by over 35%. Economic uncertainty and tighter capital flows have cooled the M&A space. Buyers are more cautious and less willing to bet big without clear ROI.
Why it matters to you
You should still aim high—but temper expectations. Many buyers are making smaller, strategic acquisitions rather than huge, splashy purchases. If your valuation expectations are frozen in 2021, you may price yourself out of the market.
What you can do
- Tailor your exit strategy to today’s market, not yesterday’s.
- Bundle offerings or partnerships to increase perceived value.
- Stay lean and efficient—you’ll still attract buyers, even in a smaller deal environment.
A $90M deal is still a great outcome—especially if your team and investors win along with you.
28. Vertical SaaS companies command 20–40% valuation premium over horizontal SaaS
What this tells us
SaaS platforms that focus on a specific industry—like legal, construction, or education—are getting significantly higher valuations than generic, one-size-fits-all tools.
Why it matters to you
Buyers want domain depth. If your product solves a pain point that only people in a specific industry face—and does it really well—you can charge more, retain better, and sell faster.
What you can do
- Dive deeper into your niche. Add features tailored to specific roles or workflows.
- Build integrations with industry-specific tools.
- Use industry language in your marketing to signal expertise.
Specialization isn’t limiting. It can be your best path to a premium exit.
29. Strategic buyers pay ~25% premium over financial buyers in competitive processes
What this tells us
When both strategic and financial buyers compete for a SaaS company, strategic acquirers usually pay more—around 25% higher on average. That’s because they’re not just buying a business—they’re buying synergy.
Why it matters to you
If you run a competitive exit process, you can attract multiple buyer types and increase your chances of a great outcome. But it requires planning and positioning.
What you can do
- Identify where your product fills a gap for larger companies.
- Create competitive tension. Don’t shop your company to just one buyer.
- Work with advisors who can manage multiple conversations and maximize leverage.
Buyers compete harder—and pay more—when your company clearly enhances theirs.
30. SaaS companies with usage-based pricing models get 10–15% higher revenue multiples
What this tells us
Traditional SaaS models charge a flat monthly or annual fee. But usage-based models—where pricing scales with customer activity—are on the rise. Buyers like them because they align revenue with value delivered.
Why it matters to you
If you’re not using usage-based pricing, you may be leaving money on the table. Not just from your customers, but from your acquirer. These models create natural expansion, lower churn, and stronger customer alignment.
What you can do
- Evaluate if your product naturally scales with usage (e.g. API calls, data volume).
- Test hybrid models: base fee + usage tiers.
- Make pricing predictable, even if usage-based—buyers like transparency.
The more your revenue grows with customer success, the more buyers will pay to be part of your journey.
Conclusion
The SaaS acquisition landscape is rich with opportunity—but also shaped by very real benchmarks and buyer behaviors. As we’ve seen across these 30 stats, the rules of the game are clear: buyers want efficiency, retention, growth, and strategic alignment. And they’re willing to pay up when those things are in place.
