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ANNUAL RESEARCH

SEG 2024 Annual SaaS Report

SaaS proves to be an enduring force.

Our SEG Annual Reports offer a distinct strategic advantage by integrating our proprietary data and expert analyses. In these reports, we detail and provide an overview of SaaS M&A transactions, unveiling annual trends. Plus, we examine the stock and financial data of over 120 publicly traded SaaS companies, delivering invaluable insights customized for your strategic planning and research requirements.

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The Top 3 Highlights

3,333
Total Aggregate Software Deals

Overall software industry M&A deal volume remains strong relative to historical standards, a steady increase compared to pre-COVID levels.

56%
of all Software M&A Deals are SaaS

SaaS M&A volume remained robust, marking the third consecutive year where SaaS constituted over 50% of total software transactions.

34%
SaaS Stock Performance Increase

Overall, the SEG SaaS Index™ experienced a remarkable increase in 2023, outpacing the S&P 500 and Dow Jones.

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An Overview of Public SaaS Companies

The public market section provides a thorough analysis of stock prices, financial data, and valuation performance for the 120+ publicly traded B2B software companies comprising our SEG SaaS Index™. This Index undergoes frequent updates, influenced by mergers and acquisitions, IPOs, financial data availability, and shifts in business models. In the latest update, eight companies, such as Roper Technologies, Toast, PTC, and others, were welcomed into the Index. A selection of the year’s top quartile companies by EV/TTM Revenue is shown below.

Notable Public SaaS Companies

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SEG SaaS Index EV/Revenue by Product Category

Several categories in the Index reported higher median EV/TTM revenue multiples in 4Q23 compared to 4Q22, indicative of the robust performance witnessed by many companies in the Index. Notably, DevOps & IT Management (9.0x in 4Q23 vs. 6.9x in 4Q22) and Financial Applications (6.4x vs. 5.4x) experienced the two most significant increases in revenue multiples.

EV/Revenue by Product Category
Quarterly Medians
4Q22
1Q23
2Q23
3Q23
4Q23
SEG SaaS Index
5.4x
6.0x
6.1x
6.0x
5.8x
Analytics & Data Management
5.0x
4.9x
4.7x
5.7x
5.8x
ERP & Supply Chain
6.8x
6.8x
7.5x
7.7x
7.4x
Financial Applications
5.3x
5.0x
5.6x
5.7x
6.3x
Sales & Marketing
5.2x
4.6x
4.7x
5.2x
4.9x
Vertically Focused
4.7x
5.8x
5.6x
5.2x
4.6x
4Q22
SEG SaaS Index
5.4x
Analytics & Data Management
5.0x
ERP & Supply Chain
6.8x
Financial Applications
5.3x
Sales & Marketing
5.2x
Vertically Focused
4.7x
1Q23
SEG SaaS Index
6.0x
Analytics & Data Management
4.9x
ERP & Supply Chain
6.8x
Financial Applications
5.0x
Sales & Marketing
4.6x
Vertically Focused
5.8x
2Q23
SEG SaaS Index
6.1x
Analytics & Data Management
4.7x
ERP & Supply Chain
7.5x
Financial Applications
5.6x
Sales & Marketing
4.7x
Vertically Focused
5.6x
3Q23
SEG SaaS Index
6.0x
Analytics & Data Management
5.7x
ERP & Supply Chain
7.7x
Financial Applications
5.7x
Sales & Marketing
5.2x
Vertically Focused
5.2x
4Q23
SEG SaaS Index
5.8x
Analytics & Data Management
5.8x
ERP & Supply Chain
7.4x
Financial Applications
6.3x
Sales & Marketing
4.9x
Vertically Focused
4.6x
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Recapping SaaS M&A Activity

In 2023, there was a notable increase in M&A activity, showing a robust performance with a 9% rise over 2020, pre-COVID levels. Although the overall aggregate software M&A volume is now comparable to pre-2021 figures, the SaaS M&A segment continued its active momentum in 2023. With 2,062 transactions, it marked the second-highest total on record, closely following the peak in 2022. Despite a 4% decrease compared to 2022, 2023 exhibited a significant uptick compared to prior years, showing a 15% increase over 2021 and a substantial 58% surge compared to 2020.

SaaS M&A Deal Volume

Annual
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Analyzing Top Product Categories

In 4Q23, Sales & Marketing led with 59 deals and maintained its position as the most active product category throughout 2023, totaling 294 transactions. Analytics and Data Management followed closely behind, securing 52 deals in 4Q23 and 285 deals for the year. ERP/Business Management maintained stable quarterly M&A volume in 2023, a testament to its mission-critical nature as a category.

Analytics & Data Management
Sales & Marketing
Content & Workflow Management
Business Management
Financial Applications
Human Capital Management

Sales & Marketing

Quarterly SaaS M&A

Analytics & Data Management

Quarterly SaaS M&A

Content & Workflow Management

Quarterly SaaS M&A

Business Management

Quarterly SaaS M&A

Financial Applications

Quarterly SaaS M&A

Human Capital Management

Quarterly SaaS M&A
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The Resurgence of Strategic Buyers

In recent years, public SaaS strategic buyers scaled back on acquisitions due to a challenging stock market environment, creating a notable opportunity for private equity to take a leading role in SaaS acquisitions. However, if Q4 is any indication, the trend may be reversing. Strategic buyers, constituting 44% of Q4 deals, had their most active quarter since 1Q22.

SaaS M&A Activity by Buyer Type

2023
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Insights to Drive Stronger Software M&A Performance

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Interactive Market Maps
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SEG SaaS Index Page
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State of SaaS M&A: Buyers' Perspectives

Archived Reports

If you are looking for a past version of SEG’s Annual or Quarterly Reports, you can now download all previously published reports from our archived section.

Annual
2023 ANNUAL REPORT
2022 ANNUAL REPORT
2021 ANNUAL REPORT
2020 ANNUAL REPORT
Quarterly
3Q23 QUARTERLY REPORT
2Q23 QUARTERLY REPORT
1Q23 SaaS M&A REPORT
1Q23 SaaS PUBLIC MARKET REPORT
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2024 SaaS M&A and Public Market Report

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Gain strategic insights into the SaaS industry with our latest report. Click the button to download your copy.