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.
Some methodology notes:
Here are the findings:
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.
Before we get there, here are a few articles I recommend for measures you can use to value SaaS companies other than EBITDA multiples.