So TechCrunch had a good story on a 19-year journey of Sharefile to an $875,000,000 exit. It was founded way back in 2005, back when my last SaaS startup was, so I have a dim memory of it.
Fast forward to today, they’ve sold for a stunning $875 million. But it’s not quite that simple.
It was bootstrapped for the first 6 years, and then acquired by Citrix in 2011 for an undisclosed amount, so likely $100-$150m or less. Acquisitions of a certain size often have to have their purchase price disclosed, although it’s complicated, and the bigger the acquirer, the less they have to disclose. But let’s assume around $100m given the times.
Fast forward 13 years (!) to 2024, and it’s been acquired for the third time, for $875 million. But at approximately $240m in ARR. Or 3.6x ARR.
Why the seemingly low multiple?
- Growth was likely quite low, less than 20%
- The acquirer was growing even more slowly, at -2.3%. So shrinking! This leaves a limited amount of flexibility in the purchase price.
So the deal likely will get Progress quickly back to growth. It makes a lot of sense.
But 3.6x ARR isn’t all that high. The price of low growth. At 100% NRR, the deal likely makes a ton of sense on a spreadsheet. That $240m ARR isn’t going anywhere in the short-term. But nor is it likely growing much.
Just one recent example of why to keep pushing. Efficiency is great. It’s critical today. But growth is 2x as important.
PE firms and other similar acquirers will all want to do deals like this once your growth slows, if your NRR stays at 100%. But 3.6x? Man. You worked too hard for that. Grow faster. I know it’s hard. But everything great is hard.
The post What’s a Mature SaaS Company at $240m ARR Really Worth? Maybe 3.6x ARR appeared first on SaaStr.
via https://www.aiupnow.com
Jason Lemkin, Khareem Sudlow
