SaaS Valuation Multiples: 2015-2026

Getting the valuation of your SaaS business right can make or break once-in-a-lifetime decisions like a company sale or a significant capital raise. 

That’s why it’s essential to understand current valuation practices, especially with the rise of AI, when the SaaS business model has come under threat. Understanding the latest SaaS valuations can help with:

1. Negotiating an acquisition offer: Many potential buyers often lowball in their initial offers. Understanding the market environment gives you leverage and context for negotiations.
2. Raising capital: Choosing a defensible valuation figure for your next round ensures you don’t undervalue your company or discourage potential investors. 
3. Understanding your company’s value: This can help you manage your wealth tied to the business. 
4. Taking strategic decisions: To maximize company value and understand what metrics drive SaaS valuation in the current cycle.

In this post, we look at valuations for public SaaS companies and what has driven their boom-and-bust cycle since 2015. We also analyze private SaaS valuations in M&A transactions to provide practical guidance to founders of mid-size SaaS companies.

What is a SaaS Business?

SaaS, or Software as a Service, delivers centrally hosted software over the internet to customers.
Vendors manage infrastructure and updates, while customers access the latest version via subscriptions or usage-based billing. The term is often misapplied, so we set clear criteria before discussing valuation multiples.
A true SaaS company meets all three conditions:

1. Software is the core offering, and licensing that software drives revenue. Marketplace, fintech, or commission-led models are excluded from this research.
2. Delivery is cloud-based and centrally hosted by the vendor, not customer-managed infrastructure. Firms deriving most revenue from on-premise deployments are excluded from our sample.
3. Access is provided as a service (subscription, pay-per-use, or per-transaction). Customers continuously receive updates and use the current supported version.

For an overview of valuations across software segments (both SaaS and on-premise), check out our separate analysis.

Public Market SaaS Valuations

Our Sample

In our analysis, we look at the most liquid SaaS companies listed on top stock exchanges:

• Companies listed on NASDAQ or NYSE
• $1B+ market cap as of April of 2026

Our analysis includes fewer companies to focus solely on pure-play SaaS businesses. This is why we excluded companies that: 

• Generate a significant part of the revenue from on-premise software: SAP, Intuit, Palantir, etc.
• Generate a significant part of the revenue from resale: Twilio, etc.
• Generate a significant part of the revenue from commissions on GMV/purchases, e.g. Applovin, The Trade Desk, etc.

We started with a sample of 26 companies in 2015. We have since managed the addition of new SaaS companies to our sample, and in case companies get delisted due to being taken private by private equity funds, they remain in our index till the point they were publicly traded. Seventy companies have passed through the index since 2015, and 54 of them were still publicly traded as of August 2026.

SaaS Stock Market Performance

SaaS companies have experienced an unprecedented run since 2015. While the post-COVID monetary stimulus certainly provided the final push forward, we’ve seen that the bulk of appreciation happened during a period of stable growth in 2015-2020. 

Our proprietary Aventis SaaS index peaked at more than 700 points (100 = January 1, 2015) in early 2021, marked by a meme stock mania and SPAC boom. This was also a period of peak IPO activity. 

The Federal Reserve’s rate hikes in early 2022 ended the bull market. As most SaaS companies were unprofitable, their valuations fell sharply as higher rates reduced the value of future cash flows. Since its peak in February 2021, the Aventis SaaS Index has declined by around 45%.

By mid-2023, the index partially rebounded amid a broader market rally and optimism around AI-driven growth. However, this recovery was concentrated among large-cap players such as Adobe, Salesforce, and ServiceNow, while many smaller SaaS companies remained stagnant.

IPO activity reflected this shift. After nearly two years of silence following the 2021 peak, Klaviyo’s September 2023 IPO tested market appetite. The cautious reception signaled a more disciplined environment where companies must prove strong growth and a clear path to profitability.

By late 2024, ServiceTitan’s successful IPO suggested a slow reopening. As 2025 began, the SaaS IPO pipeline grew, but most companies waited for better conditions to avoid down-round pricing. By mid-2025, activity remained selective, with investors prioritizing profitability and sustainable growth over aggressive expansion.

Mid 2025 was also roughly the time when the threat of AI disruption started to become evident in the stock performance of companies, but the bigger blow was still yet to come (we’re talking about the launch of several new AI tools such as coding agents by Anthropic during February and March 2026)

Note: The Aventis SaaS Index uses end-of-month data.

SaaS Revenue Multiples

EV/Revenue is the most widely used multiple for SaaS valuation. Since many SaaS companies remain unprofitable while reinvesting heavily in growth, profit-based multiples are often less meaningful. However, dividing a company’s revenue multiple by its target EBITDA margin provides a rough estimate of its potential future EV/EBITDA. For example, a company trading at 4.8x revenue that expects to reach a 30% EBITDA margin implies a future ~16.0x EV/EBITDA.

From 2015 to 2020, the median EV/Revenue multiple for public SaaS companies rose steadily, supporting higher share prices alongside strong revenue growth. The steepest climb came through 2020, when the median rose from a COVID low of 9.6x in March to a peak of 19.3x in December. Top-quartile companies traded above 30.0x, with Asana setting the record at 89.0x revenue on November 9, 2021.

For most of 2021, the median held between 16.0x and 18.5x, before collapsing in early 2022 as monetary policy tightened. By spring 2023, the median had fallen to 6.9x. Since then, multiples have stabilized. In early 2025, they briefly climbed to 7.7x amid optimism around AI integration and improving profitability, but by July 2025, renewed uncertainty and tariffs pushed the median back to around 6.0x.

Insights from our October 14, 2025, webinar, Navigating SaaS Exits in the AI Era, show that investors now reward operational efficiency and meaningful AI integration rather than speculative “AI wrappers.” Companies with durable growth, profitability, and proprietary data continue to attract premium valuations, while simpler, horizontal tools face growing AI-driven substitution risk. To learn more, read the full webinar recap here.

SaaS Revenue multiple in 2026

SaaS companies are under significant pressure in 2026. As of August 2026, the median EV/Revenue multiple stands at 4.6x. Multiples bottomed at 3.2x in June, the low point of the AI disruption sell-off, and have recovered over the summer, though they remain far below the levels of recent years.

Revenue growth across the sector has been declining since its post-COVID peak in 2021. This year, companies are guiding for growth of only 11-12%, with consensus pointing below 10% during 2027. That is why revenue multiples are increasingly hard to justify. The good news is that profitability has been improving – EBITDA margins are rising. We expect margins to continue improving, even as revenue growth remains muted.

Valuation Drivers: Growth

Revenue growth has always been a crucial SaaS metric. 

The calculation is simple. If customer lifetime value (LTV) is larger than customer acquisition cost (CAC), keep investing in new customer acquisition. Because profitability will follow at scale, short-term profits are irrelevant, and growth is key.

As with any new industry, growth starts high but slows as it becomes harder to expand revenue from a larger base. By Q3 2020, the median SaaS company’s revenue growth had slowed to 23% YoY and was on a clear downward path.

During COVID, companies rapidly digitized, pushing the median growth rate up by 11 percentage points to a peak of 33% in Q2 2021. This surge immediately boosted revenue multiples, which are highly sensitive to growth rates, especially in a low-interest-rate environment.

The jump proved short-lived. Growth rates quickly returned to their long-term decline as revenue bases expanded and market saturation set in. Growth has since dropped well below 15%, creating strong headwinds for valuations. The collapse in growth rates has been one of the core drivers behind falling revenue multiples.

By Q4 2023, the median SaaS growth rate was 17% annually, well below pre-COVID levels. It slipped to 16% in Q1 2024 and held steady through the rest of that year.

The decline has continued into 2026. Median revenue growth was 14.0% in Q4 2025 and fell to 11.8% by Q2 2026, while analyst consensus forecasts point to a further slowdown to below 10% during 2027. Figures from Q3 2026 onward are consensus estimates, not reported results, and are shown as the forecast segment on the chart.

Valuation Drivers: Profitability

The other part of the SaaS company valuation equation is profitability because cash flow is essentially the most important matter in a company’s valuation. From 2015 to 2019, SaaS companies were on track to profitability with improving EBITDA and net income margins. But these improvements stagnated after 2019 and even declined slightly as early-stage, loss-making companies entered our index. For most of the 2020 – 2023 period, a median public SaaS company operated with a net loss of roughly 9 to 13%. During that time, immediate cash flow generation became less important as interest rates stayed close to zero.

Because of this, increased interest rates were a big blow to public SaaS companies’ valuations. While yields on short-term Treasuries grew to over 5%, valuation multiples for companies with significant losses declined the fastest. 

That change in the economic environment forced SaaS businesses to adapt. From 2022 onward, many laid off staff, froze hiring, cut investment and aggressively reduced operating expenses. With the IPO window largely shut through 2022 and 2023, companies burning cash relative to their balances had to reach break-even quickly to stay afloat.

From Growth at All Costs to Profitable Scale: SaaS Margin Evolution 2023–2026

In early 2023, SaaS profitability remained the exception rather than the rule. In Q1 2023, only 23 of 68 companies in the sample were profitable at the net income level, and 30 were EBITDA-positive. Despite this, the market already rewarded profitable businesses with higher valuations, as profitable SaaS companies traded at a median 7.8x revenue multiple versus 6.7x for unprofitable peers, signaling an early rotation toward quality and cash generation.

This valuation divergence was clearly illustrated by Descartes, a logistics-focused SaaS provider. In early 2023, Descartes traded at 13.7x revenue while delivering a robust ~40% EBITDA margin. Unlike many high-growth but loss-making SaaS peers, the company proved largely immune to the subsequent tech sell-off, reinforcing the market’s growing intolerance for unprofitable growth.

By Q4 2023, SaaS profitability metrics reached an inflection point. The four-quarter average EBITDA margin across the index climbed to an all-time high of +3%, while the four-quarter average net income margin narrowed to -3.8%, its smallest loss on record at that point. This marked a fundamental shift from aggressive growth-at-all-costs strategies toward operating discipline and margin expansion.

That shift accelerated in 2024. In Q1 2024, the four-quarter average EBITDA margin reached a new record of 4.4%, while the net income margin narrowed to -1.1%, pointing toward imminent sector-wide break-even. Profitability continued to improve through the year, with the four-quarter average EBITDA margin reaching 5.4% in Q2 and the net income margin crossing into positive territory at 0.6%.

By Q3 2024, both margins were in positive territory, at 6.2% and 0.9% respectively. While layoffs and drastic cost-cutting measures began to moderate toward the end of the year, profitability remained a core strategic priority for SaaS management teams, rather than a temporary defensive response.

Through 2025 and into 2026, the cumulative impact of multi-year cost discipline and efficiency initiatives became fully visible. SaaS companies continued to expand margins, and by Q2 2026 the four-quarter average EBITDA margin had reached 11.1% while the net income margin turned solidly positive at 5.2%. This progression confirms that profitability is no longer cyclical or tactical, but a structural and valuation-defining characteristic of the modern SaaS sector.

In 2026, the one development worth flagging is that EV/EBITDA multiples are fast becoming a relevant metric for SaaS valuation, something that was almost never said before. With the median company now solidly profitable, earnings-based multiples can finally be applied across much of the index.

Valuation Drivers: Rule of 40

The Rule of 40 is calculated as a sum of the company’s growth rate and profitability. As the argument goes, SaaS companies can easily choose between revenue and growth, so fast growth compensates for low profitability and vice versa. A healthy SaaS company is supposed to score above 40 on this metric.

From 2023 onward, revenue growth decelerated for most companies. This slowdown wasn’t compensated for by the increase in profit margin. Only a few companies exceeded the Rule of 40 with a comfortable margin.

In our latest update, as of Q2 2026, the picture remains challenging. The median Rule of 40 score is just 26%, and of the 46 companies in the sample with both metrics reported, only seven (15%) clear the 40 threshold, showing that most are still struggling to balance slowing growth with profitability. The median company now pairs 11.8% revenue growth with a 14.6% profit margin, leaving it well short on both counts.

Companies scoring above 40 attract premium valuations and stronger investor interest, while those below 40 face lower multiples and tougher fundraising or exit negotiations.

Private SaaS Valuations in M&A Transactions

In this section, we dive into the M&A deals involving SaaS companies from 2015 to 2026, focusing on valuation trends and key drivers.

Our Sample

In our analysis of Private SaaS M&A transactions, we looked at 1,000+ software deals since 2015 and marked the ones where the target company is considered to be operating a SaaS business model. 

Over the past eleven years, 543 SaaS transactions had a disclosed revenue multiple, and 232 transactions had a disclosed EBITDA valuation multiple.

EV/Revenue and EV/EBITDA Multiples for SaaS Companies

Despite the volatility in public markets, revenue multiples in private SaaS M&A transactions have generally been more stable over the past decade. However, shifts in deal mix and market sentiment have still had a noticeable impact in recent years.

Between 2015 and 2026, the median SaaS company was valued at a median of 4.5x EV/Revenue. A quarter of companies achieved valuations above 8.1x, reflecting strong growth, profitability, or strategic value to buyers.

During the 2020–2021 public market boom, private SaaS multiples saw only a modest increase, rising from 5.8x to 6.3x at the peak. By 2023, the median multiple had fallen sharply to 3.7x, reflecting a cooling M&A environment and tighter buyer scrutiny.

In 2024, the median revenue multiple reached a low of 2.9x, before rebounding to 3.8x in 2025, and then 3.1x on the small sample of deals closed in the first quarter of 2026.

EBITDA multiples followed a similar pattern. Since 2019, deals involving profitable SaaS companies have consistently traded above 20.0x EV/EBITDA, with the median reaching 29.1x in 2022.

The significant spread in valuations comes down to company fundamentals. Higher-valued SaaS firms typically operate in large, expanding markets, have low churn, high net revenue retention, and efficient customer acquisition strategies. Among these factors, deal size remains the single strongest predictor of valuation, which we explore in the following section.

Valuation Drivers: Company Size

Deal size is one of the most important determinants of the valuation multiple. In our sample, the median revenue multiple was almost twice as high for deal sizes in the $50-100M basket as compared to the $20-50M basket.

There may be several factors contributing to this large difference:

1. Many larger M&A transactions involve targets from the public market. This means buyers need to pay a premium to delist the company from the stock exchange. 
2. A lot of the larger deals are highly strategic, with buyers tending to pay a premium to acquire companies that may be synergistic with their own products. Examples include Salesforce’s acquisition of Slack, Intuit’s acquisition of Mailchimp, and Adobe’s attempted purchase of Figma, abandoned in 2023 after regulatory opposition.
3. Larger companies typically operate in larger total addressable markets with ample growth potential, while many smaller software businesses are local and difficult to scale (e.g., cloud accounting software in European countries).
4. A larger transaction size opens up a larger base of potential investors. Many top private equity funds with low cost of capital have a strict minimum investment size in their mandates.

SaaS vs On-Premise Software Company Valuations

In our analysis, we compared the valuations of businesses operating a SaaS model with those of non-SaaS businesses, such as on-premise software providers, API/SDK platforms, and software component companies.

Between 2015 and 2020, the SaaS premium, which represents the valuation difference between SaaS and non-SaaS companies, averaged close to 60 percent and never dropped below 30 percent. By 2021, however, non-SaaS valuations increased sharply to a median of 5.3x EV/Revenue, which narrowed this premium as demand shifted toward traditional software businesses.

In 2022 the premium all but disappeared, narrowing to 4 percent as SaaS multiples slipped to 5.4x while non-SaaS deals held at 5.2x. In 2023 both segments repriced in a challenging M&A environment, but non-SaaS multiples fell harder, to 2.3x against 3.7x for SaaS, and the gap reopened to 61 percent.

The premium has stayed volatile since: 26 percent in 2024, 52 percent in 2025 as SaaS multiples rebounded to 3.8x, and 19 percent on the small sample of deals closed in the first quarter of 2026.

At the same time, many traditional on-premise companies have been accelerating their transition to cloud delivery and subscription-based pricing. As a result, their business models increasingly resemble those of SaaS companies, which is gradually blurring the lines between the two categories and influencing how investors assess valuation.

2026 SaaS M&A Outlook

Most buyers are strategics and top technology private-equity investors.

• Artificial Intelligence is expected to remain in focus. While SaaS companies have already started leveraging the integration of OpenAI’s ChatGPT or Anthropic’s Claude into their products, this may not be a standalone reason to unlock a valuation premium. Instead, SaaS companies with proprietary or in-house AI integrations will command higher premiums, reflecting the market’s growing appetite for advanced technology stacks and adapting to newer trends such as M&A in AI.
• Founder-driven sell pressure (AI risk): Increasing willingness of founders to sell due to concentration risk and uncertainty around AI disruption, especially when personal wealth is tied to a single SaaS asset.
• In some markets, buyers may favor AI-native solutions over traditional SaaS, skipping parts of the legacy cloud stack altogether.
• Deal flow will favor larger, scaled platforms with strong retention and clear paths to profitability. Smaller targets will still trade but with tighter diligence and more earnout structures. AI remains a key factor: basic integrations won’t drive value, but proprietary models and embedded workflows will.
• The U.S. will lead activity, with Europe gaining as rates ease. Expect cross-sector deals as incumbents in payments, healthcare, and industrials acquire SaaS + AI to stay competitive. Select IPOs may return for profitable, scaled companies, while most exits will be secondary buyouts or dual-track processes.
• In 2026, premium multiples will go to SaaS businesses with durable growth, strong cash flow, and defensible AI capabilities.
• AI M&A deals could complement SaaS products and may rise in popularity with strategic companies rushing to maintain the lead in the AI race.

Why you need a SaaS M&A advisor

Monitoring SaaS company valuations offers important insights into market trends and aids in timing your exit strategy. However, each SaaS business is unique, much like every founder’s journey. Therefore, it’s essential to consult with experts in the SaaS M&A landscape, particularly advisors who specialize in the SaaS sector and can understand your unique circumstances.

SaaS M&A advisors understand how to navigate market dynamics and valuations and coordinate all the necessary workstreams. While you concentrate on running your business, SaaS M&A advisors work diligently to ensure that no detail is overlooked and advocate for the best possible deal. Their success is directly linked to yours through a success fee structure, and their influence on the final sale price can therefore be substantial.

About Aventis Advisors

Aventis Advisors is an M&A advisor for SaaS companies. We believe the world would be better off with fewer (but better quality) M&A deals done at the right moment for the company and its owners. Our goal is to provide honest, insight-driven advice, clearly laying out all the options for our clients – including the one to keep the status quo.

Get in touch with us to discuss how much your business could be worth and how the process looks.