Anyone have experience with ARR valuations?

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October 30, 2025

by a searcher from Northwestern University - Kellogg School of Management in San Diego, CA, USA

Currently evaluating a healthcare Saas company with ARR. Would love to get some advice from folks around how to value this company... in terms of how different factors such as retention/turnover rate, ARR value etc., impact valuation. Thanks.
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Reply by a searcher
from Northwestern University in Minneapolis, MN, USA
Helpful resources: https://www.saas-capital.com/research/whats-your-saas-company-worth/ https://www.feinternational.com/blog/saas-metrics-value-saas-business https://softwareequity.com/blog/due-diligence-checklist
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Reply by an investor
in San Francisco, CA, USA
Hi Jay - I previously founded and sold a SaaS business to a PE firm. Analyzing ARR churn by customer type/contract size is something I would recommend - although it can be tricky to get accurate. Many SaaS claim ARR when some or all revenue is actually MRR, or rather annualized MRR. Also, cash paid upfront for an annual contract is valued differently than an annual contract that is paid monthly/quarterly.
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