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The Fifth SaaS Correction

Tom Tunguz

Also, 2014 to 2016 saw a 57% reduction in multiples and of course after 2008. Cloud companies' fast growth multiplied by an appreciation in multiples has pushed valuations higher since 2014. Today, we’re in the midst of the fifth. But let’s look at the most recent five years. Correction Year.

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5 Interesting Learnings From Five9 at $550,000,000 in ARR

SaaStr

In 2014, when I invested in then up-and-comer Talkdesk , it had long since IPO’d and was struggling at a $200m market cap. Five9’s revenues were 60% enterprise at IPO in 2014, but now are 83% enterprise. And Five9 has grown from just 3 $1m ACV customers in 2014 to 91 today: #2. Five9 is particularly interesting.

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5 Interesting Learnings from HubSpot as It Approaches $1 Billion in ARR

SaaStr

HubSpot is a great one that IPO’d way back in 2014 ?? HubSpot has gone global with a fury since 2014, driving from 22% international revenue to 40%. 5 Interesting Learnings from Slack at $700m in ARR. 5 Interesting Learnings from Zoom. As it IPOs. 5 Interesting Learnings from Bill.com’s IPO. With a $10k ACV. RingCentral ).

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The Startup M&A Market Fell 94% Year over Year - But One Segment is Thriving

Tom Tunguz

This change in the exit market parallels a surge in acquihires in 2014 when corporate development departments began to acquire seed-stage companies for talent rather than waiting for Series A businesses. During the 2013-2014, median acquisition prices increased by 50% in less than a year, from $36m to $54m.

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How Will the 52% Correction in the Stock Market Impact the Startup Fundraising Market?

Tom Tunguz

2014’s correction stalled and then reversed Series D round sizes for 2 years through the second correction in 2016. Three corrections in the last ten years have contracted multiples by 40% or more. These are marked in peachpuff orange rectangles above. The Series D mean round size is plotted in red.

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Massive Acquisitions in Software Startups

Tom Tunguz

In 2014, 2016, 2020, 2021, these big mergers drove the figures into the tens of billions. Year Share Good Year 2012 18.4% - 2013 25.9% - 2014 65.5% Multi-billion dollar acquisitions, the blue bars, are the largest contributors to this swing. X 2015 20.1% - 2016 43.0% X 2019 23.4% - 2020 61.1% X 2021 43.8%

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Do SaaS Startups Still Require Less Capital than 10 Years Ago?

Tom Tunguz

In 2014, I published a post called Do Startup Require Less Capital to Succeed than 10 Years Ago ? In 2014 we saw increasing efficiencies over time, which was very exciting because it reaffirmed the efficiency of SaaS go-to-market. It’s been five years and time to see how things have changed. The chart above updates that analysis.

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