SEG’s Annual Report labels 2021 as an outstanding year for the software industry. M&A activity and valuations broke records once again. SaaS deal volume grew an astonishing 40% in 2021, reaching nearly 1,800 transactions for the year.
Here is a snapshot of how public companies are performing in our SEG SaaS Index.
6 Highlights from the Report:
- The median EV/Revenue multiple for the SEG SaaS Index grew an outstanding 20% YOY, reaching a record 14.7x
- The SEG SaaS Index surpassed $600M in median TTM revenue for the first time as revenue growth spiked to
27.2% in 4Q21.
- In 4Q21, SaaS highflyers saw a significant correction in multiples as investors shifted away from riskier highgrowth companies that boasted some of the highest multiples in the Index.
- While the SaaS Index remains largely unprofitable (-3.1% median EBITDA margin), median free cash flow from
operations improved substantially over the last two years (9.7% in 2021 vs. 4.5% in 2019).
- Snowflake (99.7x), Bill.com (92.3x), and Cloudflare (90.1x) lead the SEG SaaS Index in terms of EV/Revenue
- Dev Ops & IT Management (17.4x) and Communications & Collaboration (16.5x) continued to lead other product
categories in median EV/Revenue multiples in 4Q21.
Read the full Public Market Update from Software Equity Group, here.