How Are 2019 SAAS IPOs Holding Up in This Downturn?

Aman Verjee
6 min readApr 12, 2020


· 2019 was a banner year for high-growth SAAS companies going public, with 12 companies listing their shares, including Zoom, Slack, DataDog and Crowdstrike

· These companies IPO’ed at an average EV / LTM multiple of 15x, and as of April 9 … even with the recent market rout … the 2019 SAAS IPO Class is trading even higher at 18x

· If you had been able to buy into the latest pre-IPO round of these 12 companies, you would have made a 5x return, with 11 of the 12 companies in the black

2019 was a great year to be a high-growth SAAS company going public. 12 of them floated their shares for the first time last year, at a time when the sector was trading at historically high multiples. For the most part, buying shares of these companies at the initial offering was a winning strategy for public market investors: a simple, equally-weighted basket of SAAS IPO from 2019 would have yielded a 41% return.

Even better, if you had somehow been able to invest in the latest pre-IPO round of these companies, you would have made a 5x return on your investment … and 11 of the 12 would have been in the black, even after this historic market rout.

Even if you throw out the top and bottom outliers — Zoom on the high end (they had a Jan 2017 Sequoia-led round that valued them at $1 billion) and Sprout Social on the low end (who did a 2018 round at $840 million) — this strategy still would have yielded a better than 3x return.

Now, that’s some kind of alpha!

The logos 12 companies are shown below:

SAAS Class: The Cohort of 2019 IPOs

2019 IPO Class of SAAS

Most high-growth SaaS businesses (public and private) are valued on a multiple of forward revenue with enterprise value over NTM (next-twelve-months) as a primary metric.

What is the right price for a high-growth public SaaS company?

Well, since Salesforce went public in 2004, there are about 75 other SAAS companies that have followed them into the public markets. Salesforce itself is worth $135 billion today, putting it at between 10 and 11 times its projected FY2020 revenues.

Aman Verjee

Former C-suite at PayPal, Sonos, eBay. Now general partner & founder at Practical VC, a secondary venture capital fund.