Nowadays, adopting SaaS is becoming more and more common. According to the survey, 73% of enterprises have deployed at least one application or part of computing infrastructure in the cloud. Although SaaS software has produced a series of downstream influences, it also makes software developers more and more valuable.
The increasing value of developers means that they have a more intuitive understanding of their time value, just like the traditional SaaS buyers, and they like enterprises that can help reduce the troubles of procurement, integration, management and operation. Developers need to solve those special troubles.
Let's take a moment to tell you about the development of SaaS software companies abroad.
In 20 18, there were 17 SaaS companies listed in the United States, and one * * * raised $5.2 billion, which was equivalent to the total amount of SaaS companies' financing in the secondary market from 20 14 to 20 17. In the middle of 20 19, three software companies, Zoom, Slack and CrowdStrike, went public with a valuation of more than tens of billions of dollars, which brought billions of dollars in returns to VCS that invested in them.
And their listing pricing occupies the top three in the listing valuation list of historical software companies. In recent years, the share price increase of those listed companies is even more gratifying. When MongoDB was listed on 20 17, its market value was1800 million dollars, and now it has risen to 7.8 billion dollars. Elasticity has increased from $2.5 billion in 20 18 to $7 10 billion now, and Okta has increased from $2 10/7 to $0/0 billion now!
Let's look at the M&A market of SaaS software.
In 20 14, Concur was sold to SAP at an estimated price of 8 billion dollars, which was unprecedented at that time and caused a sensation in the industry. Even at this price, it is only valued at 10 times the income. In the 12 transaction with the highest valuation multiplier in the transaction history, 10 was completed on or after 20 18.
Oracle, SAP, IBM and Salesforce, the four giants of enterprise services, started strategic acquisitions Software Company from 20 1 1, and spent 30-40 billion dollars each in these years. After acquiring LinkedIn and GitHub, Microsoft also joined the $30 billion M&A club. The scale of mergers and acquisitions of these giants is shocking. IBM spent $34.7 billion on Red Hat, Microsoft spent $26 billion on LinkedIn and Salesforce spent $654.38+06 billion on Tableau.
Why do more and more SaaS transactions have amazing valuations?
First of all, investors and M&A parties find that the subscription business model usually adopted by SaaS is highly sticky and the company's income is highly predictable, so it deserves a higher valuation premium.
The good market performance of SaaS companies listed in the secondary market makes SaaS companies that are still in the unlisted stage more attractive.
Secondly, overall, the number of enterprise targets related to cloud services is still insufficient and scarce. At least for now, the transactions completed by buyers who are willing to accept high valuation have not harmed their interests, and sometimes they have gained a lot. Traditional large-scale software enterprises can only continue to acquire SaaS enterprises to achieve further growth, while helping enterprises to innovate and keep pace with the times.