Study: the median valuation for SaaS companies raising their Series C rose by 40% to $210M this year, while their median revenue grew 20%
Miles Kruppa / Financial Times : Tweets: @outsidadgitator , @julianklymochko , @trengriffin , and @caffeinatedinv1 Tweets: @outsidadgitator : 2)the shift to work-from-home has added real value to cloud computing platforms, allowing Amazon to sweep the table on both sides, selling to producers and distributing products. https://www.ft.com/... @julianklymochko : Less than 20 years ago, SaaS businesses were typically valued at 3x - 5x sales These days some are being valued at 200x - 250x sales https://www.ft.com/... https://twitter.com/... Tren Griffin / @trengriffin : “Median valuation for software-as-a-service companies raising their third round of venture funding, or Series C, rose by 40% to $210m this year, according to an internal study by the Silicon Valley Bank seen by the FT. Their median revenues grew by 20%.” https://www.ft.com/... @caffeinatedinv1 : Been wondering for some time, does Marathon's Capital Cycle theory not apply to SaaS players? Effectively ppl are expecting them all to fight the fade due to a sust. compet. adv? Some will for sure, but all or even most? https://twitter.com/...
Context & Ripple Effects
An SVB study puts hard numbers on what venture investors have been feeling all year: the median Series C round now values a SaaS company at $210M, up 40%, while median revenue grew only 20% — price rising at twice the rate of performance. The move lands on top of a public market already stretched, with recent IPOs trading at their richest revenue multiples since the dot-com era.
The repricing has an arc behind it. The high-growth cohort that went public in 2019 — including Slack and Cloudflare — showed median annual revenue of $242M growing ~48%, establishing the benchmark these private rounds are now priced against. And the thesis that online markets let startups reach billion-dollar-plus outcomes faster than ever gave investors a rationale for paying up earlier.
First-order effects
- Series C-stage founders raise at materially richer terms — a $210M median price for businesses growing 20% — while the investors writing those checks accept a wider gap between entry price and current fundamentals.
- Late-stage funds competing for these rounds face the same froth documented in the public market's dot-com-era revenue multiples, compressing the margin for error on entry pricing.
Second-order effects
- To justify higher entry prices, SaaS operators push harder on expansion levers such as adding financial services that can lift revenue per customer 2-5x, shifting diligence from headline growth toward monetization depth.
- Companies that went public from the 2019 high-growth SaaS cohort become the reference points private investors cite when defending today's Series C marks — and the yardstick those marks will eventually be judged against.
Third-order effects
- If pricing keeps outrunning growth across successive vintages, late-stage software gets treated as a scarce asset class rather than a cash-flow claim, with returns increasingly dependent on each buyer paying more than the last.
- The structural risk mirrors the pattern the dot-com comparison implies: a correction would hit the most recently repriced rounds first, separating funds that bought growth from funds that bought momentum.
The trend: Private software valuations are decoupling from underlying revenue growth, with SaaS rounds repriced on asset scarcity rather than current financials.