PVC SaaS Index™ | Q2 2022 Update

Aman Verjee
8 min readMay 28, 2022

SaaS Multiples Are at a 4-Year Low: Where Do They Go From Here?

Practical Summary:

  • Our PVC SaaS Index™ companies trades at just over 8x EV / LTM revenue, lower than at any time since the Q1 2020 market panic that followed the COVID pandemic … and around where SaaS multiples were in 2017–2018
  • The median company multiple in our index is down 54% from the peak in late 2020 / early 2021; the top quartile multiple has compressed even further, by 65% (from 31x to 11x)
  • If you go back to Q4 2017, you can draw a fairly flat, straight line connecting the median and top-quartile SaaS multiples over time, and valuations today just have just about fully normalized … you just have to ignore the 2020/2021 “COVID bubble” and the ensuing Q1 2022 hangover
  • Even though SaaS multiples are back to early 2018, SaaS companies are performing better … with faster growth, better profitability and larger TAMs

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This post is an update in a quarterly series of posts that tracks the PVC SaaS Index™, a basket of publicly traded US-listed SaaS companies.

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This post is an update in a quarterly series of posts that tracks the PVC SaaS Index™, a basket of publicly traded US-listed SaaS companies.

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Aman Verjee

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