How to Value SaaS Companies

How to Value SaaS Companies

Software-as-a-service (SaaS) companies have had a great run over the course of the current business cycle. The sector has routinely traded at a multiple above five times revenue, even while having low or negative profit margins. From 2010 to 2013, market observers posited that valuation multiples in the sector were driven by growth alone – the faster the better – no matter how much cash burn it takes to achieve. Since the public market for software stocks hit a speed bump starting back in Q1 of 2014, however, there has been a general perception that profitability is becoming more of a factor in driving SaaS valuations. This awareness is driving capital allocation discussions at companies across the SaaS sector, both public and private. Should a company raise money to “keep its foot on the gas?” Or should it perhaps slow growth a bit but make the move to “EBITDA-positive?”

T.H.E. Journal: PresenceLearning Redesigns and Re-releases Lightyear Tool

PresenceLearning released Lightyear, a newly redesigned therapy program that offers high fidelity and live health sessions while reportedly putting less demand on school network bandwidth. The program is designed so that more schools — particularly schools in areas with limited access to high-speed Internet — can gain access to PresenceLearning’s extensive network of qualified clinicians to assist students with special needs.

Catalyst-backed MINDBODY now serving 50,000+ business subscribers

MINDBODY, Inc. (NASDAQ:MB), the leading provider of cloud-based business management software for the wellness services industry, has surpassed the 50,000 subscriber benchmark. The company’s expanding subscriber base demonstrates the growing, global adoption of cloud-based business management amongst wellness providers as the health and wellness revolution accelerates around the world.

MINDBODY Named on Deloitte’s Fast 500 List

MINDBODY, the largest global provider of web and mobile management solutions to the wellness and beauty industry, has been recognized for the fourth consecutive year by Deloitte’s Technology Fast 500™. Ranked at 228, MINDBODY experienced 437% revenue growth between 2008 and 2012.

Laudable Logistics: Simplified Shipping for Consumers & SMBs

Convenience, pricing and reliability are critical for shipping services to gain traction, and these innovative consumer- and SMB-centric shipping solutions bring logistics and supply chain management (SCM) to the mainstream. Similarly, last holiday season we looked at SCM through the lens of a consumer in our blogpost about the importance of having efficient SCM systems to ensure that gift purchases arrived on time and in the correct size. We have continued to research the B2B SCM software sector, and we created a [supply chain management cloud-based challengers market map] [link to market map] and [research report] [link to memo] to highlight the key trends.

MINDBODY Acquires Jill’s List, Launching Nationwide Wellness Network

MINDBODY, the largest provider of online business management software in the health and wellness industry, acquired Jill’s List, the leading online platform for Integrative Healthcare practitioners. The acquisition marks the launch of MINDBODY’s new wellness network which connects consumers, employees and doctors with integrative healthcare practitioners, riding the rising tide of consumer-driven healthcare and facilitating the adoption of a more holistic and preventive approach to wellness.

MINDBODY partners with lululemon to build om finder app

MINDBODY, the largest provider of online business management software to the health and wellness industry, partnered with the Canadian-based athletic apparel company lululemon to launch the om finder app, now available in iTunes. Produced by lululemon athletica and powered by MINDBODY’S Finder technology, the om finder app marks the first major digital initiative for lululemon as part of their commitment to create more hyper-local experiences for their guests.

Ascentis Announces Record Growth for Fiscal Year 2012

Ascentis Corporation, a market leader in easy-to-use human resources software, online payroll services, and human capital management (HCM) solutions, announced significant growth in fiscal year 2012 (FY2012) with a 51% increase in bookings and 24% increase in revenue.