SaaS IPO Benchmarking | ARR at IPO

Aman Verjee
8 min readMay 14, 2020


· The enterprise value of a SaaS company at IPO can be predicted almost entirely with just two metrics: 1) the annual recurring revenue in the most recent quarter, and 2) the yoy growth rate of that ARR from the year-ago period

· The relationship between revenue growth and the EV / ARR multiple can be plotted cleanly on a line of best fit that explains an IPO’s price to within 2 turns (i.e. if the plot predicts a 10x EV / ARR, the actual price would be within 8–12x)

Aman Verjee

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