      cloudedjudgement.substack.com · 2020-07-17
      · 2148d
    

Clouded Judgement

SaaS multiples contracted for the first time in weeks as the market cooled, with nCino's IPO highlighting the disconnect between IPO pricing and market valuations. Morgan Stanley data reveals only 25% of enterprise workloads run in the cloud, signaling significant runway for SaaS/cloud adoption. The article provides benchmarking data on SaaS valuation multiples, growth rates, margins, and unit economics across public SaaS companies.

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Metrics in this report

Cloud Workload Penetration

25%percent

current

Enterprise application workloads running in public cloud (Morgan Stanley, US/EU data)

Cloud Workload Penetration (Projected 2023)

49%percent

target

Enterprise application workloads expected in public cloud by end of 2023

SaaS CAC Payback Period

28months

median

Public SaaS companies as of July 2020

SaaS Gross Margin

73%percent

median

Public SaaS companies as of July 2020

SaaS LTM Growth Rate

34%percent

median

Public SaaS companies as of July 2020

SaaS NTM Growth Rate

21%percent

median

Public SaaS companies as of July 2020

SaaS Net Revenue Retention

117%percent

median

Public SaaS companies as of July 2020

SaaS Operating Margin

-15%percent

median

Public SaaS companies as of July 2020

SaaS Revenue Multiple (High Growth >30%)

24.3xrevenue multiple

median

SaaS companies with >30% projected NTM growth

SaaS Revenue Multiple (Low Growth <15%)

8.6xrevenue multiple

median

SaaS companies with <15% projected NTM growth

SaaS Revenue Multiple (Mid Growth 15-30%)

13.0xrevenue multiple

median

SaaS companies with 15-30% projected NTM growth

SaaS Revenue Multiple (Overall Median)

12.9xrevenue multiple

median

Public SaaS companies as of July 2020

SaaS Revenue Multiple (Top 5)

38.0xrevenue multiple

median

Top 5 highest-valued SaaS companies

nCino IPO First-Day Pop

129%percent

actual

nCino IPO priced at $31, opened at $71