SaaS stocks plunged in the first quarter of the year. The E-Spring index dropped by around 21% in terms of EV/Sales.
The first quarter of the year remains on the same trajectory as the year end of 2021 with a decline in valuation. Public SaaS companies are now trading at 2020 type levels. We seem to be returning to a more ‘normal’ situation with the end of the US monetary stimulus. The macroeconomic context has also turned negatively with the geopolitical context and rising interest rates.
Index 2022 removals and additions
2021 has been a busy one for mergers and acquisitions, with some big private equity deals in the SaaS software space. This means that our basket has to take into account the delisting of a few companies: Blue Prism Group was acquired by private equity firm Vista Partners, Talend was acquired by PE fund Thoma Bravo and Rib Software by Schneider Electric.
We decided to replace Blue Prism by UiPath (European born leader in the RPA software) and Talend by GitLab and Rib Software SE by Matterport.
| Name | Country | Market Cap (€) | EV/Sales 2022 | EV/EBITDA 2022 | P/E 2022 |
| Adobe Inc. | US | 195 Bln | 12.1x | 24.4x | 33.8x |
| Alteryx, Inc. | US | 4.37 Bln | 6.6x | – | – |
| Anaplan, Inc. | US | 8.82 Bln | 16.1x | – | – |
| AppFolio, Inc. | US | 3.55 Bln | 8.5x | 77.1x | – |
| Atlassian Corporation Plc | AU | 69.1 Bln | 28.2x | – | – |
| ATOSS Software AG | DE | 1.43 Bln | 12.6x | 42.7x | 73.0x |
| ATTRAQT Group plc | UK | 72.7 Mio | 2.1x | 26.9x | 102.5x |
| Avalara, Inc. | US | 7.9 Bln | 9.7x | – | – |
| Avast plc | CZ | 6.97 Bln | 8.1x | 14.6x | 19.2x |
| AVEVA Group plc | UK | 8.74 Bln | 6.5x | 20.0x | 23.0x |
| BlackLine, Inc. | US | 3.96 Bln | 8.3x | – | – |
| Datadog, Inc. | US | 42.3 Bln | 30.3x | – | – |
| DocuSign, Inc. | US | 19.3 Bln | 10.2x | – | – |
| Dynatrace, Inc. | US | 12.3 Bln | 14.9x | 57.1x | 70.4x |
| Elastic N.V. | US | 7.62 Bln | 9.5x | – | – |
| Everbridge, Inc. | US | 1.6 Bln | 4.6x | 58.2x | – |
| GitLab Inc. | US | 7.13 Bln | 27.7x | – | – |
| HubSpot, Inc. | US | 21.6 Bln | 13.6x | – | – |
| Matterport, Inc. | US | 2.13 Bln | 13.0x | – | – |
| Medallia, Inc. | US | 4.93 Bln | – | – | – |
| Mimecast Limited | UK | 4.79 Bln | 8.9x | 31.6x | 54.5x |
| Nemetschek SE | DE | 10.1 Bln | 13.1x | 40.1x | 63.8x |
| New Relic, Inc. | US | 4 Bln | 5.3x | – | – |
| PagerDuty, Inc. | US | 2.77 Bln | 10.1x | – | – |
| Paycom Software, Inc. | US | 18.8 Bln | 15.7x | 39.4x | 65.6x |
| salesforce.com, inc. | US | 192 Bln | 8.0x | 69.1x | 147.4x |
| ServiceNow, Inc. | US | 103 Bln | 15.1x | 47.6x | 77.0x |
| Sidetrade SA | FR | 183 Mio | 4.4x | 50.6x | 107.5x |
| Smartsheet Inc. | US | 6.5 Bln | 12.4x | – | – |
| Splunk Inc. | US | 20.6 Bln | 9.2x | – | – |
| TeamViewer AG | DE | 2.57 Bln | 5.0x | 9.9x | 21.1x |
| UiPath Inc. | US | 13.7 Bln | 15.0x | – | – |
| Unity Software Inc. | US | 26.8 Bln | 20.0x | – | – |
| Veeva Systems Inc. | US | 29.6 Bln | 16.5x | 57.4x | 77.0x |
| Wix.com Ltd. | Other | 5.34 Bln | 3.6x | 64.1x | – |
| Workday, Inc. | US | 54.6 Bln | 11.5x | – | – |
| Workiva Inc. | US | 5.42 Bln | 10.9x | – | – |
| Yext, Inc. | US | 837 Mio | 2.1x | – | – |
| Zendesk, Inc. | US | 13.1 Bln | 8.4x | 83.5x | 141.6x |
| Zuora, Inc. | US | 1.72 Bln | 5.1x | – | – |
| Median | 10.1x | 45.2x | 70.4x |
Source: S&P Capital IQ, Valutico (31/03/2022)
Index background
Our basket is of course partial and has no intention to reflect perfectly the entire SaaS Public landscape. Our goal is to give an outlook of the market with a more balanced index of what is available with the US Nasdaq SaaS index. More than 100 Public SaaS companies are available. Here, we focus on European-born leaders like Avast, Datadog, Elastic, Talend, TeamViewer, Zendesk, …
At E-Spring, we like to keep an eye on the SaaS Public companies. The market data gives good insights when we do a private SaaS business valuation. In some ways, it’s always connected to the market. It shows the trends and the confidence in the sector. Who are the champions of the league. So, we decided to construct our own SaaS index of 40 companies that we selected as being as much as possible representative of the SaaS B2B market, keeping the right balance between the US and Europe (European-founded public SaaS companies).
For this outlook, we choose a quarterly report to keep a mid-term view of the market. As much as possible we will keep the same basket but feel free to interact with us to enrich this exercise. We hope it will be helpful in these particular times.
Do you have questions regarding SaaS business valuation? Contact us.
