Valuation multiple for a SaaS subscription software with high turnover

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August 29, 2021

by a searcher from INSEAD in New York, NY, USA

Hi,
I am looking to acquire a B2B SaaS company (~$1M EBITDA) that has high user/customer turnover (average life of 2-3 years). Does anyone have guidance on how to look at the valuation as a multiple of EBITDA?

Nagendra

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Reply by a searcher
from University of Cambridge in Düsseldorf, Deutschland
Hi Nagendra, just one thought: might it make sense to look in the online consumer space? Dating apps or fitness services have a similar profitability and retention profile as a B2B SaaS business of this sort, though potentially higher growth.
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Reply by an investor
from University of California, Berkeley in San Francisco Bay Area, CA, USA
Low because high churn B2B companies are unlikely to get offers from professional PE/VC investors. Less than 1x ARR in my experience.
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