After the multiple compression of 2022–2023, SaaS valuations have stabilized in 2024. Here are the current benchmarks investors use to price growth-stage software.
Public SaaS P/S Multiples (2024)
As of mid-2024, the median public SaaS company trades at approximately 4–6x forward revenue. Top-quartile high-growth companies (40%+ ARR growth) command 8–12x. This compares to peaks of 15–25x in 2021.
| Growth Category | Typical P/S Range (2024) |
|---|---|
| Hypergrowth (50%+ ARR) | 8–15x |
| High growth (30–50% ARR) | 5–10x |
| Growth (20–30% ARR) | 3–6x |
| Moderate (10–20% ARR) | 2–4x |
| Mature (<10% ARR) | 1–2x |
Private Market ARR Multiples
Private market valuations lag public markets by 6–12 months. In 2024: - Seed: 8–15x ARR (often pre-revenue; based on team/market) - Series A: 8–15x ARR for 80%+ growth companies - Series B: 10–20x ARR for 50%+ growth + strong NRR - Series C+: Converges toward public comps with illiquidity discount
What Drives Multiple Expansion
Higher multiples are justified by: 1. Revenue growth rate — the single biggest driver 2. Net Revenue Retention — >120% NRR commands a 1.5–2x premium 3. Gross margin — 80%+ gross margin typical for high-multiple SaaS 4. Rule of 40 — growth + FCF margin above 40 supports premium multiples 5. Market size — demonstrably large TAM 6. Competitive moat — switching costs, network effects, data advantages
Calculate your current P/S and comparable valuation at the Price-to-Sales Calculator.