SaaS companies grow much faster than SaaP (Software as a Product) companies. Public SaaS companies grew at 28% in 2014 versus 8% for SaaP companies (Software Equity Group). According to the Pacific Crest SaaS Survey, private SaaS companies grew even faster at a median rate of Read More
The typical SaaS company grows faster, loses more money, and has a higher valuations than product sale companies. Weighted Average Profitability Cash Flow from Operations Growth Price/Revenue Ratio Public SaaS Companies -8% +15% 33% 8.7x Public Software Companies +8% +28% 8% 3.3x Source: SEC filings – Read More
The valuation of SaaS companies is much higher than software product sales companies. Public SaaS companies have an Enterprise Value to Revenue median ratio of 5.7x contrasted with 2.9x for software companies according to Software Equity Group’s 2015 Software Industry Financial Report. Do Investors love Read More
High-growth SaaS companies are often unprofitable, yet financial institutions value them highly. The median net income for Public SaaS companies is negative 4.5%. Yet, despite these losses, the Price to Enterprise Value ratio for SaaS companies is 8.0x compared with 3.2x for Software companies, according Read More
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