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What Are Public SaaS Companies Taken Private At? 7.7x ARR On Average Per SaaSomomics

SaaStr

ARR was the Median acquisition price in a “take private deal” Interestingly, it’s not all that different post-Boom and pre-Boom, as you can see above. Todd Gardner took a look at a series of public “take private” deals from 8/21 to 8/23, spanning the Boom and the Reset. What did he find? You might be worth less

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A Look Back at Q1 '24 Public Cloud Software Earnings

Clouded Judgement

It’s worth pointing out that Azure is a bit above the long term trendline, while AWS is still below (but accelerating up). Their ongoing revenue can “fund” new logo acquisition and allow the business to operate profitably at paybacks much larger than what private companies (with smaller ARR bases) can afford.

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Picking Teams in AI

Tom Tunguz

It’s unclear how the Databricks acquisition might change that relationship. Five years ago, many startups defaulted to AWS for the generous credits, broad catalog, & rapid pace of innovation. Cloud infrastructure players are picking teams within the infrastructure layer.

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The State of Subscription Apps with RevenueCat’s CEO Jacob Eiting and Growth Advocate David Barnard

SaaStr

Acquisition costs are dramatically lower for consumer and word-of-mouth distribution can go viral. In B2B, you also have fixed costs, but you can diversify monetization based on tokens or seats, or in the case of AWS, however you like. Because of that, you see a 5x increase in conversion from trial to paid on the app store.

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The Relationship Between Margins and Acquisition Prices

Tom Tunguz

This is as true for their books business as their infrastructure business, AWS. Over sushi, a friend explained to me that this strategy might also extend to the way the company views acquisitions. Bezos has explicitly stated this strategy and it’s the one that has led to Amazon’s massive success in many different lines of business.

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A Look Back at Q4 '23 Public Cloud Software Earnings

Clouded Judgement

It looks at the YoY dollar change in quarterly revenue from the hyperscalers (just looking at Azure / AWS because the data goes back further) going back a few years. If we break this down and look at Azure and AWS independently (graphs below), you’ll see how the AWS “swings” were a lot more volatile.

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Clouded Judgement 6.9.23 - Recap of Consumption Trends in Q1 '23

Clouded Judgement

Very healthy new business (new customer) acquisition. Coming out of earning season I’m slightly more optimistic about a back half acceleration (August or later) than I was coming in. The Good Mongo: Very Positive - Is The Bottom Behind Them? They guided to 26-27% growth in Azure in Q2 (with 1% coming from AI).

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