PUBLIC MARKETSEG Snapshot: 1Q22 SaaS Public Market UpdateEV/Revenue multiples dropped significantly for public SaaS companies, down 30% from 13.9x in 4Q21 to 9.8x in 1Q22.
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SEG’s 1Q22 SaaS Public Market Update is a snapshot of how public companies are performing in our SEG SaaS Index. The Index is comprised of 110 publicly traded companies that primarily offer solutions via the cloud and may have a subscription or transaction-based pricing model.
- Due to the large influx of companies taking advantage of strong stock market performance in 2021, there were 14 additions to the SEG SaaS Index in 1Q22. Notable additions include Couchbase, Squarespace, PowerSchool, Instructure, Riskified, Alkami, and Monday.com.
- EV/Revenue multiples dropped significantly in 1Q22, down 30% from 13.9x in 4Q21 to 9.8x in 1Q22. This material decline over the last four months has occurred as investors shy away from riskier, high-growth investments and focus more on profitability instead. Geopolitical unrest, inflation, interest rates, and federal monetary policy have all contributed to this shift.
- Security and human capital management had the highest revenue growth in 1Q22 as employee retention, labor shortages, hybrid work environments, and increased attention on cybersecurity solutions brought these product categories into focus.