Late-stage software startups may have the most valuation issues – TechCrunch

Late-stage SaaS startups could be the most challenged when it comes to changing valuation brands among tech companies, according to new data.

A Silicon Valley Bank (SVB) report exploring software startup trends in the first quarter details that late-stage SaaS valuations in the US rose the fastest in 2021, ending the year with the highest revenue multiples. higher than their set of peers.

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It is well known that the rapid inflation in the value of software stocks following the onset of the pandemic in 2020 and through much of 2021 has provided fuel for late-stage startup valuations. But the extent of the damage late-stage SaaS startups may have ahead of them is only now apparent.

Recall that the market is already seeing an increase in layoffs and some unicorns are looking to reassess their equity for employee retention purposes.

Is it ironic that the startups that have increased in valuation the most seem to face the biggest correction? No. It is causal. Let’s talk why.

What goes up

We’re on the precipice of Q1 VC data, which means it’s almost time to retire 2021 results as temporally relevant.

But before the deadline, watch how SVB details the evolution of revenue multiples for two subsets of the SaaS market in the United States – enterprise applications (lighter colors) and enterprise infrastructure (lighter colors). dark):

Picture credits: Bank of Silicon Valley. Used with permission.

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