Every category of software business
SaaS is not a monolithic category. Valuation, buyer profiles, and deal structure vary significantly across software types. Acquiry brings vertical-specific knowledge to every mandate.
Vertical SaaS
Industry-specific software serving defined markets: legal tech, proptech, healthtech, agritech, construction, and logistics. High retention, strong pricing power, defensible niches.
Horizontal SaaS
Cross-industry platforms: CRM, HR, project management, accounting, marketing automation. Larger TAM, more competitive, valued on growth rate and net revenue retention.
Developer & API Tools
Developer platforms, API businesses, data infrastructure, and DevOps tooling. Usage-based pricing, high technical moats, strategic acquirer interest from large platforms.
SaaS-Enabled Marketplaces
Platforms combining software with marketplace dynamics. Two-sided networks with embedded SaaS tools. Complex valuation requiring both SaaS and marketplace frameworks.
Consumer SaaS
Subscription software serving individual users: productivity tools, creative software, personal finance, health and fitness. Valued on subscriber count, churn, and LTV.
AI-Powered SaaS
Software businesses with AI as a core product differentiator. Rapid growth, evolving competitive dynamics, and premium valuations for defensible AI capabilities.
What drives SaaS valuation
SaaS businesses are valued on a combination of growth rate, revenue quality, and operational efficiency. Understanding which metrics matter most for your specific business is critical to achieving a premium outcome.
Annual Recurring Revenue (ARR)
The primary valuation anchor for most SaaS businesses. ARR multiples range from 2x to 15x+ depending on growth rate, retention, and market position.
Net Revenue Retention (NRR)
NRR above 110% signals strong expansion revenue and is a significant premium driver. Buyers pay materially more for businesses where existing customers grow over time.
Growth Rate
YoY ARR growth is the single most important multiple driver. Businesses growing 50%+ command premium multiples. Sub-10% growth businesses are valued closer to EBITDA multiples.
Churn Rate
Monthly gross churn above 3% is a red flag for most buyers. Logo churn and revenue churn are both assessed. High churn compresses multiples significantly.
Gross Margin
SaaS businesses typically target 70-85% gross margins. Below 60% raises questions about infrastructure costs or professional services dependency.
Founder Dependency
Businesses where the founder is deeply embedded in sales, product, or customer relationships carry a dependency discount. Buyers pay more for operationally transferable businesses.
Who buys SaaS businesses
The SaaS buyer pool is deep and diverse. Acquiry maintains active relationships across all buyer categories and matches sellers to the buyer profile most likely to pay a premium for their specific business.
Strategic Acquirers
Larger software companies acquiring for product capability, customer base, or market access. Typically the highest payers when there is genuine strategic fit. Acquiry identifies and approaches strategic buyers with a tailored thesis for each acquisition.
Private Equity & Growth Equity
PE firms and growth equity funds acquiring SaaS businesses for platform builds, add-ons, or standalone investments. Typically value on ARR multiples with a clear path to EBITDA improvement. Active across the $5M to $200M+ range.
Search Funds & Independent Sponsors
Entrepreneurial buyers acquiring a single business to operate. Strong fit for founder-led SaaS businesses in the $1M to $10M ARR range where the seller is looking for a capable operator to take over.
SaaS Roll-Up Platforms
Acquirers building portfolios of SaaS businesses, often with a shared infrastructure or go-to-market model. Active in the lower mid-market. Can move quickly and offer certainty of close.
What buyers examine in SaaS due diligence
SaaS due diligence is more rigorous than most sellers expect. Understanding what buyers will examine allows you to prepare properly and avoid surprises that kill deals or compress price.
MRR / ARR Reconciliation
Buyers will reconcile reported ARR against actual contracted and collected revenue. Discrepancies between bookings and cash received are a common issue.
Cohort Analysis
Retention by cohort reveals whether the business is improving or deteriorating. Buyers want to see cohort data going back at least 24 months.
Customer Concentration
Any single customer representing more than 10-15% of revenue is a concentration risk. Buyers will price this risk into their offer or structure earnouts around it.
Technology & Infrastructure
Code quality, technical debt, infrastructure costs, and scalability. Buyers with technical teams will conduct code reviews and architecture assessments.
Contract Terms
Auto-renewal clauses, cancellation provisions, price escalation rights, and assignment clauses all affect deal structure and value. Contracts are reviewed in full.
CAC & Payback Period
Customer acquisition cost and payback period reveal the efficiency of the growth engine. High CAC with long payback periods raises questions about unit economics.