Does anyone have any insight into a range of valuations for SaaS / software companies that bill their clients on per use or consumption basis as opposed to more standard monthly or annual recurring contract?
I would love to get insight into what the multiples are on software revenue or EBITDA.
| +134 | Restructuring: Anti-climactic Experience | 36 | 4h |
| +109 | IB Net Worth / Savings Check | 51 | 4h |
| +99 | Woman who emptied Knicks trashcan on street then stole it was DEI exec, worked at JPMorgan Chase | 25 | 1h |
| +82 | Stop sleeping on UBS - it’s pretty good | 29 | 41m |
| +56 | 2026 VAULT PRESTIGE RANKINGS | 30 | 1h |
| +55 | Hot take: I’d rather be at Desjardins than UBS for investment banking in 2026 | 10 | 3m |
| +39 | AI + Financial Modelling | 12 | 1d |
| +32 | Hardest interview experiences? | 17 | 21m |
| +28 | Summer before college | 17 | 19h |
| +26 | Current State of UBS in North America | 8 | 2d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Based on the most helpful WSO content, here are some insights into valuing SaaS companies, including those that bill on a per-use or consumption basis:
Valuation Metrics for SaaS Companies:
Revenue Multiples:
Key Metrics:
Valuation Multiples:
Example:
Additional Considerations:
For more detailed metrics and valuation frameworks, you can refer to the following links: - https://a16z.com/2015/08/21/16-metrics/</a">16 Metrics - https://a16z.com/2015/09/23/16-more-metrics/</a">16 More Metrics
These resources provide comprehensive insights into the specific metrics and valuation approaches for SaaS companies.
Sources: PE recruiting technical questions (software specific), Q&A: Technology IB Analyst, Beginners Guide to Valuation and Metrics By Sector, L/S SaaS Modeling, An Overview of Technology Media and Telecom (TMT) - Part 2 of 2
You can expect volume based businesses to trade at 10-15x EBITDA and subscription based businesses at 20+ (good ones especially if vertical software, otherwise mid to high teens). The issue with volume based is that you don’t have a lot of revenue visibility so you never know what’s coming in
Twilio would be an example. Usage based garners lower multiples bc the revenue is not contractual, highly variable with no downside protection
Temporibus nesciunt ipsam modi itaque sit. Nisi dolore ipsa magni et et voluptatem rerum veniam. Accusantium et aut animi ab tempore facilis beatae. Perspiciatis explicabo laborum eius dolorem placeat.
Qui autem quis et qui. Voluptates repellendus similique id ut tenetur ex. Qui voluptatem atque atque harum molestiae id dolorum. Qui possimus repellat et quia qui qui qui.
Voluptatem cupiditate doloribus suscipit omnis. Aut ipsam hic itaque. Placeat in tempora consequuntur earum enim. Accusantium quo qui neque adipisci quod laboriosam deserunt. Doloremque corporis nam illo modi nostrum sapiente voluptatibus dolore.
Ut provident architecto fugit optio. Fugit ea consectetur facere vel quis et dolor. Corporis eum ut expedita sequi dolor voluptates. Repudiandae qui quisquam quis sit.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...