EBITDA Multiples for SaaS Companies

Using EBITDA multiples for SaaS companies is a tricky valuation method, because so many SaaS companies have negative EBITDA. 

SaaS companies aren’t like industries that have been around for a long time that have been reasonably stable enough to value using a certain multiple metric like a sales multiple or an EBITDA multiple.

And, there are a myriad of other factors that affect the success of SaaS companies and also other metrics that are more relevant in valuing SaaS companies. 

Having said that, for those who are curious about EBITDA multiples for SaaS companies, I pulled that data and here it is below. 

EBITDA Multiples for SaaS Companies

Some methodology notes:

  • Companies with negative EBITDA were eliminated from the data set
  • Outliers with EBITDA multiples smaller than 1.0x and larger than 30.0x were eliminated from the data set
  • I looked up EV / EBITDA multiples for 2 sets of data: (1) public SaaS companies and (2) recent M&A transactions and investments 
  • I wanted to compare the median EBITDA multiples for these 2 sets of data to see if they can be corroborated

Here are the findings:

ebitda valuation multiples for saas companies

public saas companies ebitda multiples

As you can see from two different sets of data, the median EBITDA multiples for SaaS companies are within close range of each other. 

For public companies where 95 SaaS companies were analyzed, the median EBITDA multiple is 11.7x whereas looking at recent M&A transactions, the median EBITDA multiple is 11.1x. 

Other SaaS Business Valuation Multiples 

Before we get there, here are a few articles I recommend for measures you can use to value SaaS companies other than EBITDA multiples.

4 thoughts on “EBITDA Multiples for SaaS Companies”

  1. Ximena

    Thanks a lot for your help! Great great help! by any chance you have an analysis on insurance companies?

    1. microcap.co

      Thanks for your comment! Great idea; I will add that to the list and produce the analysis on insurance companies soon!

  2. Very beautiful article. Thanks for sharing the information regarding EBITDA Multiples for SaaS Companies. It is really helpful for me. I believe SaaS is the future of online business.

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