Valuation Multiples for Startup Acquisitions in August 2022 to Feb 2023
A recent report on startup acquisitions in the second half of 2022 provides insightful data on current valuation multiples across different industries and business sizes. Here’s a look at the key trends:
Revenue and EBITDA Multiples by Industry and Size
The report broke down multiples by both industry and company size, showing how valuations differ.
| Industry | Size | Revenue Multiple | EBITDA Multiple |
|---|---|---|---|
| SaaS | <$100k | 3.4x | 5.5x |
| SaaS | $100k-$1M | 3.1x | 5.9x |
| SaaS | $1M+ | 2.2x | 4.9x |
| Ecommerce | <$100k | 1.8x | 3.1x |
| Ecommerce | $100k-$1M | 1.0x | 3.2x |
| Ecommerce | $1M+ | 0.7x | 3.0x |
| Shopify SaaS | NA | 5.1x TTM Revenue | NA |
| Marketplace | <$100k | 2.6x | NA |
| Marketplace | $100k-$1M | 0.7x | NA |
| Agency | NA | 1.2x TTM Revenue | 3.5x TTM Profit |
Key Takeaways:
- SaaS companies attract the highest multiples, especially under $1M in revenue.
- Ecommerce multiples decline significantly as revenue grows.
- Agency models get lower revenue multiples than SaaS.
- Profitability multiples are more consistent across revenue size.
These valuation trends show where the market sees the most growth potential and risk. SaaS startups have upside, but ecommerce models need to scale to command higher multiples.
Time to Close Deals
The report also provided data on how quickly deals closed across industries:
- SaaS – Average 121 days, fastest 2-3 days
- Ecommerce – Average 88 days, fastest 7 days
- Shopify SaaS – Average 137 days, fastest 16 days
- Marketplace – Average 155 days, fastest 14 days
- Agency – Average 115 days, fastest 9 days
Key Takeaways:
- SaaS and agency models tend to sell the quickest.
- Marketplaces take the longest time to close acquisitions.
- The fastest deals show some are willing to move quickly for the right startup.
These timeframes help set expectations for how long the acquisition process takes in different fields. While some deals come together quickly, founders should plan for 3-5 months on average.